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Quarterly Investment ReviewQ1 / 2018

2 Parmenion Investment Management Quarterly Investment Review

Parmenion Investment Management Quarterly Investment Review 3

Important Notes 4.

Parmenion Investment Management 5.

Market Commentary 6.

Featured Article 7.

PIM Strategic Multi-Option Active and Passive Portfolios 8.

PIM Strategic Portfolios 12.

PIM Strategic Guardian Portfolios 16.

PIM Strategic Active Portfolios 20.

PIM Tactical Active and Passive Portfolios 22.

PIM Tactical Income Solution 28.

PIM Strategic Ethical Active Portfolios: Profile A-D 32.

PIM Tactical Ethical Active Portfolios 40.

DFA Multi-Option: UK Perspective 44.

DFA Multi-Option: Global Perspective 48.

Distribution Technology Multi-Option 52.

Portfolio Changes 57.

Index and Peer Group Returns 59.

Solutions Index 60.

Contents

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Important Notes

Views and Opinions

The views and opinions expressed in this document are those of Parmenion Investment Management. They should not be taken as a personal recommendation to buy or sell, or as advice on how any investment mentioned is likely to perform. Every care has been taken to ensure the accuracy of the information published in this document. It cannot, however, be guaranteed.

Performance Data

All risk grade performance figures are from FE Analytics, formerly Financial Express, and assume that net income has been reinvested (“total return basis”) and that the client has been invested throughout the period to 31 March 2018 (“bid to bid basis” so that there is no impact from the bid/offer spread, and there are no Initial Charges or Fund One-Off Costs incorporated).

Fund prices are published after the payment of Fund Ongoing Charge Figures, Fund Trading Costs and Fund Incidental Costs (the latter two being newly declared charges under MIFID II) so these charges are included in the performance figures quoted here. These figures should be close to the Gross Performance (excluding charges) figures given in the quarterly client valuation reports, provided the client has been invested in the same model throughout the period.

However, as different clients have different fee structures, the performance figures given in this document do not include Annual DFM, Custody or Adviser charges; nor do they include Ongoing Custodian dealing charges or Fund One-Off Costs.

The impact of all charges not included in these performance figures are shown for existing clients by the difference between Gross and Net Performance figures in their quarterly valuation reports, where they are also broken out as individual monetary amounts.

For Advisers wishing to estimate returns that are approximately comparable to client portfolio performance, the client’s Annual DFM, Custody and Adviser Charges (though importantly not the OCF element of the Total Annual Charge or TAC) should be subtracted from the 12m performance figures provided here or applied pro rata to other periods. Turnover times the applicable Ongoing Custodian dealing charge would give an estimate of annual dealing costs.

Performance figures assume that sales and purchases of funds instructed for rebalancing and fund switches will be made on the same day. However, in the context of client portfolios at least a 24 hour delay may be imposed between sales and purchases, to ensure settlement proceeds have been received before purchases are made. This is to protect the pooled client money account by ensuring that only money belonging to clients is used to fund their purchases. Where performance data is not available for a period of five years or more, this is quoted from inception date. Where no performance figures are shown, no data is available which we have labelled as N/A for the purposes of this document.

Standard Disclaimer

The tables in this document provide past performance data and should not be taken as a guide to future returns.

The value of investments and the income that can be earned from them may go down as well as up and a client may not get back the full amount invested. Rates and bases of taxation are subject to change. The risks of investment associated with different asset classes, for example, overseas equity, property, corporate debt, commodities and alternative assets vary in their nature.

Yield

The Quarterly Investment Review quotes the historic yield, which reflects distribution declared over the past twelve months as a percentage of the unit price. It is based on a snapshot of the portfolio on that day.

Seeking appropriate Financial Advice

Parmenion is not authorised to provide investment advice to individuals. It is important that clients take a medium to long term view when investing and are realistic about performance outcomes.

If a client wishes to obtain financial advice as to whether an investment is suitable for their needs, they should consult an authorised Financial Adviser. Clients should ensure they have understood the contents of their Adviser’s suitability report before proceeding with any proposed investment.

Regulatory

Parmenion Investment Management Ltd is a subsidiary of Parmenion Capital Partners LLP.Parmenion Capital Partners LLP is authorised and regulated by the Financial Conduct Authority,registration number: 462085. Wholly owned subsidiary of Aberdeen Asset Management PLC and Aberdeen Investments Limited. Parmenion Capital Partners LLP is registered in England and Wales OC322243.

Contact Details

Head Office: 2 College Square Anchor Road, Bristol BS1 5UE.

Office: 0345 519 0100 Website: www.parmenion-im.co.uk Email: [email protected]

For professional use only


Parmenion Investment Management (PIM) is a leading provider of discretionary management services to Financial Advisers. Renowned for its investment expertise, service excellence and unique risk management framework, PIM provides Advisers with an extensive range of market - leading investment solutions to assist in creating customised offerings to best meet the specific requirements of their individual clients.Our aim is to be the investment manager of choice for Financial Advisers looking to profitably grow their business. We pledge to undertake the investment research, fund selection and monitoring, allowing you to focus more closely on ensuring the on-going suitability of the selected investment solution to best align with the risk mandate agreed between you and your clients. This ensures that the client and Adviser can have complete confidence in their investments and their risk-adjusted returns regardless of market conditions, strategy or investment style, whilst also providing Advisers with greater opportunity to expand new business prospects.

The enhanced client and Adviser confidence stems from the unique approach PIM takes towards investing. With a firm belief that risk and return are inextricably linked, our focus at all times is on managing the expectations of clients and Financial Advisers in relation to their investment outcomes – a fundamental premise being that long term returns are likely to be commensurate with the level of risk taken.

In contrast, many Investment Managers focus on benchmark investment performance, which we believe only leads to disappointment. Instead, we place the emphasis on managing risk so that clients understand the inherent volatilities they are taking with their investments and consequently the range of outcomes they can expect.

We believe the management of risk within an investment portfolio is critical. To assist in this process Modern Portfolio Theory (MPT) is used to substantiate and underpin our investment solutions with the objective of reducing overall risk whilst maximising returns for any given level of risk taken. This is done by varying the exposure to risky and defensive asset classes and back testing using 20 years of historical data to help determine an optimised weighting to each asset class for any given level of risk. PIM then overlays this with our experience and a variety of techniques, including stress testing, that takes into account a range of potential scenarios to ensure that each and every portfolio is suitably protected and diversified.

The comprehensive PIM investment range encompasses a Strategic Multi-Option solution , with a mix of Active and Passive options, plus Tactical, Income, de-accumulation and Ethical solutions. Each of the PIM solutions are built using asset classes (Equities, Fixed Interest and Property) that are optimally combined to match the risk tolerance of each client.

PIM undertakes rigorous research for each fund included in its portfolios. The objective is to select funds that will provide favourable risk adjusted returns over the long term. The research of these funds is divided into two stages: qualitative and quantitative. The qualitative element involves meeting with the fund manager to understand their investment philosophy, process and methodology and how they have generated the favourable risk-adjusted performance that PIM has identified. The quantitative analysis measures raw data including the risk/return performance of the fund and the downside risk management and skill of the fund manager.

Parmenion Investment Management


Market Commentary

Simon Brett Director & Chief Investment Officer Parmenion Investment Management

It was all going so well! 2018 began with synchronised world growth (itself quite rare), the financial crisis of 10 years ago was fading into history, and even Europe appeared not to have a periodic bout of euro problems. Then at the end of January volatility returned with a vengeance. To put some figures to the path of stock markets this year, the FTSE All Share by the middle of January had risen by just over 1% and subsequently fell by 8% over the next three weeks. Over the first quarter as a whole it fell by approximately 7%.

The sell off in stock markets was a result of higher than average wage growth in the US. The annual figure was year on year growth of 2.9% versus an expected 2.5%. This was followed a month later by 2.5%, suggesting that the higher number was an aberration. Markets feared that inflation was taking hold and that in turn would prompt the US Federal Reserve to raise interest rates perhaps higher and faster than expected. And that may dent support of an already highly valued stock market. Add President Trump announcing tariffs on steel and aluminium imports, the prospect of a trade war between the US and China, and the markets have a lot to think about.

Despite these alarming headlines the fundamentals of economic growth remain good. In the US a combination of tax cuts and growth has resulted in companies reporting better than expected profits. Unemployment is low at just over 4%, there are plenty of job vacancies and house prices are on the rise. Barring any unforeseen hiccups, it appears US growth is well underpinned for 2018.

In the UK, the ongoing discussion about the exact form of the Brexit is perhaps resulting in a discount for our domestic stock market versus its international peers. Although economic data is perhaps more mixed than the US, with inflation remaining sub 3% and wage growth edging upwards, the consumer may actually experience some real rise in living standards. Similarly, as in the US, the Bank of England is wanting to raise interest rates, and will probably do so twice this year should the economic background remain benign. Hopefully any positive news of progress on a trade deal with the EU should increase confidence of both the consumer and business.

CBOE Volatility Index

Looking ahead as always it pays to ask “what are the downsides?”.Barring the unforeseen unexpected shock, rising interest rates that impinge on growth is the primary concern. Can central banks raise rates whilst maintaining the current expansion? Secondly, although the protectionist rhetoric is manageable at the moment, any escalation of protectionism by the various trading blocs could have a major impact. It would hit world trade, which in turn would hit sales and profits and the value of companies and stock markets could fall. Combine the above and the ending of “easy” money, it is perhaps not surprising that the era of low volatility is coming to an end. And if that proves to be the case, investors more than ever should be comfortable with their risk exposure because that will determine their returns over the long run.

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Source: Yahoo!


Featured Article How low can the US dollar go?

Michael Sawh, CFA Senior Investment Manager Parmenion Investment Management

It’s often said that ‘when America sneezes, the world catches a cold’. With the US dollar suffering a notable downward trend over the past quarter, not unlike a bout of seasonal flu, what are the causes, investment implications and prospects for a recovery in the greenback? Currencies are typically viewed as proxies for national economic strength. FX traders tend to buy strong economic news flow and sell on softer data releases, such as Gross Domestic Product figures, employment statistics and confidence surveys. This logic assumes that better economic prospects may lead to higher interest rates, in order to combat inflation, and so attract global money flows to benefit from higher deposit rates. Hence, good news boosts the exchange rate, and vice versa.

For the US, this situation is greatly complicated by the dollar’s status as the foremost international reserve currency on which most financial and trading flows depend. In time of market stress, the greenback is still viewed as a crucial safe haven asset, reflecting the importance of the nation’s geopolitical status as a pre-eminent superpower. Thus, American politics and economics often mix to form a potent cocktail for capital market volatility. This quarter’s concerns have focused on the longstanding potential for a trade war between the US and China, with retaliatory measures being announced against 128 US exports.

US Dollar Index

Over the past year, the trade-weighted US Dollar Index, a popular yardstick for the currency relative to a basket of major currencies, has fallen to 2014 levels. The chart opposite shows how this index has been a bumpy ride since the Great Financial Crisis of 2008, with a consistent devaluation trend since peaking at over 103 in 2017.

Theories abound as to the key drivers and sustainability of this currency move. For some, Trump’s policies could revive inflation and, although sellers of US Treasury Bonds have pushed bond yields higher, given the inverse relationship between bond prices and yields, global investors remain wary of dollar exposure. Others discern a fundamental change in American economic policy away from innovation and productivity towards a less attractive trajectory marked by tax cuts and higher spending. Many investors are concerned that presidential rhetoric aimed at ‘talking the dollar down’, so as to improve the competitiveness of US exports, could prove counterproductive. Aggressive negotiation tactics could increase the likelihood of a trade-based conflict with the potential for tit-for-tat protectionism and higher prices to the detriment of all parties. Still others anticipate a strategic move away from the US dollar by central banks who wish to hold more diversified currency reserves.

Whatever the causes, a weaker dollar has pervasive consequences for investors. Commodity markets tend to move in the opposite direction to the US dollar, suggesting support for higher oil and gold prices, for example. For UK-based portfolio managers, overseas company earnings are translated into sterling at less attractive dollar rates. Within the FTSE 100, which has circa 70% of company revenues generated overseas, this places downward pressure on headline profitability for many stocks. UK exports also become more expensive and less competitive in the US, our fourth largest trading partner. At the same time, a stronger domestic currency could have a deflationary impact on the UK due to the falling price of imports.

Equally, for the US, a weaker dollar could exacerbate the inflationary pressures already fostered by low unemployment and strong economic growth, as American consumers pay more for imported goods and locally manufactured products whose input prices have been forced up by tariffs. For the Euro area, deflationary forces due to dollar weakness would be unwelcome given the desire of the European Central Bank to see robust growth with modest inflation. Elsewhere, emerging markets might benefit from lower effective costs of dollar-denominated debt.

Looking ahead, there appears to be considerable political headwinds to a reversal of recent dollar moves, while history suggests significant downside is possible. Nevertheless, currencies are notoriously volatile and difficult to forecast, even over the short term. In contrast, Parmenion solutions are carefully diversified across asset classes with a longer-term perspective which has delivered attractive risk-adjusted returns over several market cycles.2010 2012

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US Dollar Index Source: Federal Reserve Bank of St.Louis


PIM Strategic Multi-Option Active and Passive Portfolios

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PIM Strategic Multi-Option - Asset Allocation Table

Risk Grade

1 80% 20% 0% 0% 0% 0% 0% 100%

2 25% 55% 10% 5% 5% 0% 0% 100%

3 15% 55% 10% 10% 5% 5% 0% 100%

4 15% 35% 10% 20% 10% 10% 0% 100%

5 5% 30% 10% 20% 15% 20% 0% 100%

6 0% 25% 10% 20% 20% 25% 0% 100%

7 0% 15% 15% 20% 20% 25% 5% 100%

8 0% 0% 15% 20% 15% 35% 15% 100%

9 0% 0% 10% 15% 15% 35% 25% 100%

10 0% 0% 0% 10% 15% 40% 35% 100%

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Active portfolios are rebalanced to their asset allocation on a quarterly basis. Passive portfolios are rebalanced to their asset allocation on a half yearly basis.

The Multi-Option offering is built around seven asset classes; Managed Liquidity, Fixed Interest, Property, UK Value and Income, UK Growth, Developed Markets and Emerging Markets. An investor in the Multi-Option offering assumes that the risk and return relationships between the various asset classes are stable over the long term. Thus, the asset allocations for the ten Risk Graded portfolios will not change frequently. The Multi-Option offering allows a choice of either Active or Passive investment for each asset class.

The PIM Strategic Passive solution, is identical in structure to the PIM Strategic Multi-Option Passive solution and as such is excluded from the QIR. Strategic Multi-Option gives Advisers the flexibility to choose between Active or Passive for each asset class, whilst PIM Strategic Passive has a passive fund selection across all available asset classes. Whilst the DFM fee differs slightly for PIM Strategic Multi-Option (proportional to the Active exposure) this would not affect the performance figures as they are gross of fees from Parmenion or the Adviser.

Fund OCF 0.10% 0.59% 0.72% 0.85% 0.77% 0.83% 1.02%

Historic Yield 0.22% 2.54% 3.23% 3.81% 2.07% 0.72% 1.15%

Fund OCF 0.10% 0.08% 0.72% 0.12% 0.05% 0.08% 0.22%

Historic Yield 0.22% 1.80% 3.23% 4.74% 3.55% 1.89% 1.85%

Net Ongoing Charge Figure (OCF) and Historic Yield

The fund OCF and historic yield for each asset class are shown below. The data included will vary from month to month, depending on the fund selection of the investment manager and the expenses of the underlying funds themselves. These figures are therefore only included for the purposes of transparency.

PIM Strategic Multi-Option Active

Fund OCF and historic yield data is correct as at 03 April 2018.



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gic Multi-Option Active PIM Strategic Multi-Option Passive

Federated Short-Term Sterling Prime

Vanguard UK Government Bond Index

Threadneedle UK Property Authorised Trust Feeder

Vanguard FTSE UK Equity Income Index

Vanguard FTSE UK All Share Index

Vanguard US Equity Index

Vanguard Emerging Markets Stock Index

BlackRock ICS Institutional Sterling Liquidity Premier

L&G All Stocks Index Linked Gilt Index

L&G UK Property Feeder

Vanguard FTSE Developed Europe ex UK Equity Index

Vanguard UK Investment Grade Bond Index

Standard Life Investments UK Real Estate Income Feeder

L&G Japan Index

Vanguard Global Bond Index GBP Hedged

L&G Pacific Index

Portfolio Holdings as of 31 March 2018

The current portfolio holdings for PIM Strategic Multi-Option are shown in the tables below, as at 31 March 2018. Please refer to page 57 for details on fund changes over the period. If you have any further queries, please refer to your relationship manager.

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Allianz Gilt Yield


Unicorn UK Income

LF Lindsell Train UK Equity

Dodge & Cox US Stock

GS Emerging Markets Equity Portfolio

BlackRock ICS Institutional Sterling Liquidity

M&G Index Linked Bond


Trojan Income Liontrust Special Situations

Vontobel US Equity

Schroder Global Emerging Markets

Fidelity Moneybuilder Income


Rathbone Income

Jupiter UK Special Situations

Pioneer US Fundamental Growth

MI Somerset Emerging Markets Dividend Growth

BlackRock Corporate Bond

Threadneedle UK Equity Income

Investec UK Alpha

Fidelity American Special Situations

Fideity Emerging Markets

Goldman Sachs Global Fixed Income Plus Portfolio

Evenlode Income

Jupiter European

M&G Optimal Income

CF Miton UK Multi Cap Income

Threadneedle European Select

Jupiter Strategic Bond

FP CRUX European Special Situations

LF Morant Wright Nippon Yield

Schroder Tokyo

Veritas Asian

Stewart Investors Asia Pacific Leaders


PIM Strategic Multi-Option Active - Portfolio Returns to period end 31 March 2018

All portfolios continue to perform in line with their relative risk over 3 months, 2, 3 and 5 years (with the exception of Risk Grade 9 over 5 years) owing to the strong relative performance of defensive assets over 3 months, Developed and Emerging Markets Equity over 2 and 3 years and UK Growth and Developed Markets Equity over 5 years. Over 6 months and 1 year, performance is distorted as Property and Emerging Markets Equity were the best performing asset groups which typically sit at opposite ends of the risk spectrum.

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Passive

Please refer to Important Notes on page 4 for how performance figures are calculated. Performance data is correct as of 03 April 2018. Past performance is not an indication of future returns. The value of investments and any income from them is not guaranteed and can go down as well as up.

PIM Strategic Multi-Option Passive - Portfolio Returns to period end 31 March 2018

All portfolios continue to perform in line with their relative risk over 3 months, 2, 3 and 5 years (with the exception of Risk Grade 9 over 3 months) owing to the strong relative performance of defensive assets over 3 months, Developed and Emerging Markets Equity over 2 and 3 years and UK Growth and Developed Markets Equity over 5 years. Over 6 months and 1 year, performance is distorted as Property and Emerging Markets Equity were the best performing asset groups which typically sit at opposite ends of the risk spectrum.

1 -0.01% 0.35% 0.47% 2.11% 2.39% 6.69%

2 -0.79% 0.79% 1.51% 7.13% 8.51% 20.37%

3 -1.35% 0.65% 1.56% 9.63% 10.73% 25.20%

4 -2.49% 0.10% 1.42% 12.64% 12.48% 29.01%

5 -3.22% -0.05% 1.65% 17.01% 16.47% 37.18%

6 -3.74% -0.20% 1.78% 19.64% 18.72% 41.82%

7 -3.75% 0.09% 2.59% 21.65% 20.47% 43.95%

8 -4.01% 0.45% 3.68% 27.96% 25.43% 50.63%

9 -3.97% 0.80% 4.49% 31.76% 27.84% 51.02%

10 -4.20% 0.98% 5.03% 37.18% 31.07% 52.75%

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1 -0.06% 0.30% 0.56% 2.57% 2.39% 5.98%

2 -0.77% 0.62% 1.84% 8.28% 9.04% 19.54%

3 -1.30% 0.37% 1.83% 10.32% 11.37% 24.95%

4 -2.20% -0.28% 1.61% 12.13% 13.75% 31.72%

5 -2.90% -0.40% 1.79% 15.72% 17.77% 40.79%

6 -3.36% -0.50% 1.91% 17.87% 20.18% 46.44%

7 -3.37% -0.24% 2.69% 19.50% 21.94% 49.20%

8 -3.80% -0.06% 3.57% 24.47% 26.36% 55.98%

9 -3.88% 0.28% 4.42% 28.23% 28.51% 55.69%

10 -4.27% 0.41% 4.96% 33.25% 31.37% 56.71%



PIM Strategic Multi-Option Active

PIM Strategic Multi-Option Active and Passive Portfolios

Managed Liquidity 0.10% 0.17% 0.28% 0.65% 0.55% 2.92%

Fixed Interest -0.72% 0.81% 1.69% 10.21% 9.68% 18.60%

Property 1.27% 3.85% 7.41% 6.45% 15.31% 41.85%

UK Value and Income -5.48% -4.36% -1.25% 12.26% 14.38% 43.49%

UK Growth -4.88% -0.70% 3.14% 23.47% 24.56% 53.08%

Developed Markets -4.91% -0.34% 1.24% 30.02% 33.21% 75.71%

Emerging Markets -2.97% 3.13% 11.76% 47.72% 36.05% 39.32%

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Fixed Interest -0.47% 1.07% 1.22% 7.68% 9.58% 22.54%

Property 1.27% 3.85% 7.41% 6.45% 15.31% 41.85%

UK Value and Income -6.68% -2.58% -1.07% 16.23% 9.28% 27.49%

UK Growth -6.51% -1.89% 1.59% 23.77% 18.82% 37.58%

Developed Markets -4.30% 0.17% 2.39% 37.02% 36.51% 78.98%

Emerging Markets -2.40% 4.15% 11.19% 49.45% 35.68% 36.89%

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PIM Strategic Multi-Option Passive

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PIM Strategic Multi-Option - Asset Class Returns to period end 31 March 2018

The PIM Strategic Multi-Option Risk Graded portfolios are built through a weighted exposure to seven underlying asset classes. For transparency purposes the returns of each asset class are given below. These returns should not be considered in isolation as the asset class risk and return characteristics are taken into account within the construction of each risk graded portfolio.




PIM Strategic Conviction PortfoliosC

PIM Strategic Conviction Portfolios - Asset Allocation Table

PIM Strategic Conviction was launched in August 2015. The solution combines both active and passive funds within each asset class in order to achieve attractive long term risk adjusted returns, a unique feature within the PIM investment solutions. By combining both types of fund, the PIM Conviction Solution overcomes the difficulty of choosing one approach over the other. PIM uses its experience to decide the split between active/passive by examining monthly a range of quantitative and qualitative factors. Thus the split between active and passive in each asset class is likely to vary over time depending on PIM’s analysis and interpretation of market conditions. The current allocations can be seen on page 13.

The PIM Strategic Conviction solution is built around seven broad asset classes; Managed Liquidity, Fixed Interest, Property, UK Value and Income, UK Growth, Developed Markets and Emerging Markets. Fixed Interest is then split into four sub asset classes: UK Gilts, Index Linked Gilts, Corporate Bonds and Strategic Bonds. Developed Markets is also split into four sub asset classes; European Equity, US Equity, Japanese Equity and Asia Pacific ex Japan Equity. An investor in the PIM Strategic Conviction assumes that the risk and return relationships between the various asset classes are stable over the long term. Thus, the asset allocations for the ten Risk Graded portfolios will not change frequently.

Asset Group 1 2 3 4 5 6 7 8 9 10

Managed Liquidity 80.00% 25.00% 15.00% 15.00% 5.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Gilts 3.00% 8.25% 8.25% 5.25% 4.50% 3.75% 2.25% 0.00% 0.00% 0.00%

Index Linked Gilts 2.00% 5.50% 5.50% 3.50% 3.00% 2.50% 1.50% 0.00% 0.00% 0.00%

Corporate Bonds 7.00% 19.25% 19.25% 12.25% 10.50% 8.75% 5.25% 0.00% 0.00% 0.00%

Global Bonds 8.00% 22.00% 22.00% 14.00% 12.00% 10.00% 6.00% 0.00% 0.00% 0.00%

Property 0.00% 10.00% 10.00% 10.00% 10.00% 10.00% 15.00% 15.00% 10.00% 0.00%

UK Equity Income 0.00% 5.00% 10.00% 20.00% 20.00% 20.00% 20.00% 20.00% 15.00% 10.00%

UK Equity Growth 0.00% 5.00% 5.00% 10.00% 15.00% 20.00% 20.00% 15.00% 15.00% 15.00%

European Equity 0.00% 0.00% 1.00% 2.00% 4.00% 5.00% 5.00% 7.00% 7.00% 8.00%

US Equity 0.00% 0.00% 3.00% 6.00% 12.00% 15.00% 15.00% 21.00% 21.00% 24.00%

Japanese Equity 0.00% 0.00% 0.50% 1.00% 2.00% 2.50% 2.50% 3.50% 3.50% 4.00%

Asia Pacific ex Japan Equity 0.00% 0.00% 0.50% 1.00% 2.00% 2.50% 2.50% 3.50% 3.50% 4.00%

Emerging Market Equity 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 5.00% 15.00% 25.00% 35.00%

*Portfolios are rebalanced to their asset allocation on a quarterly basis or when a change is made between the active/passive allocations.


Fund OCF 0.10% 0.13% 0.33% 0.35% 0.55% 0.72% 0.56% 0.48% 0.56% 0.72% 0.74% 0.62% 0.70%

Historic Yield 0.22% 1.39% 0.00% 2.97% 2.63% 3.23% 4.15% 2.66% 1.72% 0.51% 1.57% 1.87% 1.43%




Active/Passive Allocation as at 31 March 2018

The chart below displays the current active/passive weights within each asset class as at 31 March 2018.

INDE

X LI

NKE

D GI

LTS

CORP

ORAT

E BO

NDS

STRA

TEGI

C BO

NDS

PROP

ERTY

UK E

QUIT

Y IN

COM

E

GILT

S

MAN

AGED

LIQ

UIDI

TY

UK E

QUIT

Y GR

OWTH

EURO

PEAN

EQU

ITY

US E

QUIT

Y

JAPA

NES

E EQ

UITY

ASIA

PAC

IFIC

EX

JAPA

N E

QUIT

YEM

ERGI

NG

MAR

KET

EQUI

TY

MAN

LIQUIDITY

%

ACTIVE PASSIVE

0

10

20

30

40

50

60

70

80

90

100

GILTS

INDEX LIN

KED

CORP BONDS

GLOBAL

BONDS

PROPERTY

UK INCOME

UK GROWTH

EUROPE

US EQUITY

JAPAN

ASIA EX JAPAN

EMERGING M

ARKETS


INDE

X LI

NKE

D

GILT

S

CORP

ORAT

E

BON

DS

GLOB

AL

STRA

TEGI

C B

ONDS

PROP

ERTY

GILT

S

MAN

AGED

LI

QUID

ITY

PIM Strategic Conviction Active and Passive Funds

Portfolio Holdings as of 31 March 2018 The current portfolio holdings for PIM Strategic Conviction are shown in the tables below, as at 31 March 2018. Please refer to page 57 for details on fund changes over the period. If you have any further queries, please refer to your relationship manager.


Allianz Gilt Yield





Unicorn UK Income


Jupiter European









M&G Optimal Income


Trojan Income

Liontrust Special Situations



Schroder Tokyo

Veritas Asian

Fidelity Emerging Markets




Rathbone Income



LF Miton US Opportunities

L&G Japan Index

L&G Pacific Index



Evenlode Income

Investec UK Alpha




LF Miton UK Multi Cap Income




UK E

QUIT

Y

GROW

TH

EURO

PEAN

EQ

UITY

US E

QUIT

Y

JAPA

NES

E

EQUI

TY

EMER

GIN

G

MAR

KET

EQ

UITY

UK E

QUIT

Y

INCO

ME

ASIA

PAC

IFIC

EX

JAP

AN

EQUI

TY


PIM Strategic Conviction Portfolios C

PIM Strategic Conviction - Portfolio Returns to period end 31 March 2018

All portfolios continue to perform in line with their relative risk over 3 months, 2 years and since inception owing to the strong relative performance of defensive assets over 3 months and Developed and Emerging Markets over the latter periods. Over shorter periods, performance is distorted as Property, Japan and Asia over 6 months and Property, Europe, Japan and Emerging Markets over 1 year were the best performing asset groups which typically sit at opposite ends of the risk spectrum.

1 YE

AR R

ETUR

N

3 M

ONTH

RET

URN

Risk Grade

1 -0.04% 0.33% 0.54% 2.40% 2.87%

2 -0.78% 0.73% 1.80% 7.75% 9.82%

3 -1.36% 0.51% 1.83% 9.89% 12.63%

4 -2.42% -0.13% 1.69% 11.96% 15.53%

5 -3.17% -0.28% 1.95% 15.69% 20.78%

6 -3.67% -0.41% 2.11% 17.90% 23.96%

7 -3.69% -0.20% 2.95% 19.68% 26.51%

8 -4.11% -0.11% 3.98% 25.18% 34.04%

9 -4.14% 0.12% 4.91% 29.02% 39.04%

10 -4.48% 0.13% 5.56% 34.22% 45.90%

PIM Strategic Conviction - Asset Class Returns to period end 31 March 2018

The PIM Strategic Conviction portfolios are built through a weighted exposure to thirteen underlying asset classes. For transparency purposes the returns of each sub-asset class are given below. These returns should not be considered in isolation as the asset class risk and return characteristics are taken into account within the construction of each risk graded portfolio.

FROM

INCE

PTIO

N

(31.

08.2

015)

3 M

ONTH

RET

URN

Asset Class

Managed Liquidity 0.10% 0.17% 0.28% 0.65% 0.80%

Gilts 0.28% 2.49% 0.84% 8.79% 14.20%

Index Linked Gilts -0.72% 2.82% -0.39% 19.78% 21.37%

Corporate Bonds -1.02% 0.71% 2.02% 9.17% 11.68%

Global Strategic Bonds -0.51% 0.21% 1.91% 6.88% 7.32%

Property 1.27% 3.85% 7.41% 6.45% 11.38%

UK Equity Income -6.32% -3.69% -1.03% 12.84% 15.27%

UK Equity Growth -5.53% -1.09% 3.35% 21.87% 30.49%

European Equity -3.96% -2.43% 8.53% 31.33% 39.18%

US Equity -5.70% -0.99% -1.30% 29.67% 44.69%

Japanese Equity -4.65% 3.08% 6.53% 44.58% 48.31%

Asia Pacific ex Japan Equity -3.63% 4.37% 1.98% 31.71% 47.33%

Emerging Market Equity -2.90% 2.26% 12.60% 48.72% 63.80%


Performance data is correct as of 03 April 2018. Past performance is not an indication of future returns. The value of investments and any income from them is not guaranteed and can go down as well as up.

6 M

ONTH

RET

URN

6 M

ONTH

RET

URN

FROM

INCE

PTIO

N

(31.

08.2

015)

1 YE

AR R

ETUR

N

2 YE

AR R

ETUR

N

2 YE

AR R

ETUR

N


PIM Strategic Guardian PortfoliosG

PIM Strategic Guardian Portfolios - Asset Allocation Table

The PIM Strategic Guardian solution enables clients to invest in one of ten carefully constructed Strategic portfolios, according to the client’s requirement for yield, total return, attitude to risk and capacity for loss. The amount invested into each portfolio is dependent upon the clients’ risk profile and, once agreed, is kept constant with periodic rebalancing. This solution has been specifically designed to be used within a drawdown environment whether that be via pension drawdown or otherwise.

Asset Group 1 2 3 4 5 6 7 8 9 10

Managed Liquidity 55.00% 30.00% 15.00% 7.00% 5.00% 2.00% 0.00% 0.00% 0.00% 0.00%

UK Gilts 5.00% 10.00% 10.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

UK Index Linked Gilts 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 2.00% 2.00% 2.00%

UK Corporate Bonds 10.00% 16.00% 25.00% 27.00% 17.00% 12.00% 6.00% 0.00% 0.00% 0.00%

Global Strategic Bonds 15.00% 20.00% 15.00% 13.00% 10.00% 10.00% 9.00% 5.00% 0.00% 0.00%

Global High Yield Bonds 0.00% 0.00% 2.00% 4.00% 5.00% 5.00% 6.00% 9.00% 9.00% 7.00%

UK Property 5.00% 5.00% 5.00% 6.00% 6.00% 6.00% 7.00% 8.00% 7.00% 2.00%

UK Equity Income 0.00% 5.00% 15.00% 15.00% 23.00% 20.00% 14.00% 0.00% 0.00% 0.00%

UK Mid Cap Equity 0.00% 0.00% 0.00% 2.00% 3.00% 3.00% 3.00% 3.00% 4.00% 5.00%

UK Small Cap Equity 0.00% 0.00% 0.00% 4.00% 5.00% 7.00% 7.00% 8.00% 9.00% 10.00%

US Equity 0.00% 0.00% 0.00% 3.00% 6.00% 12.00% 13.00% 15.00% 16.00% 18.00%

US Equity Small Cap 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 5.00% 8.00% 10.00% 11.00%

Europe ex UK Equity 0.00% 0.00% 0.00% 4.00% 5.00% 6.00% 8.00% 8.00% 10.00% 10.00%

Pacific ex Japan Equity 0.00% 0.00% 0.00% 2.00% 3.00% 5.00% 6.00% 8.00% 9.00% 10.00%

Emerging Markets Equity 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 5.00% 15.00% 15.00% 20.00%

Targeted Return 10.00% 14.00% 13.00% 13.00% 12.00% 12.00% 11.00% 11.00% 9.00% 5.00%

*Portfolios are rebalanced to their asset allocation on a quarterly basis.


Fund OCF 0.10% 0.06% 0.10% 0.48% 0.74% 0.64% 0.72% 0.87% 0.83% 1.36% 0.41% 0.43% 0.90% 0.51% 1.08% 0.86%

Historic Yield 0.22% 1.44% 0.00% 3.36% 3.05% 4.78% 3.22% 3.70% 2.53% 0.14% 0.95% 0.51% 1.35% 5.21% 1.38% 2.99%



Fund OCF and historic yield data is correct as at 03 April 2018

UK IN

DEX

LIN

KED

GILT

SUK

COR

PORA

TE B

ONDS

GLOB

AL S

TRAT

EGIC

BON

DSGL

OBAL

HIG

H Y

IELD

BON

DSUK

PRO

PERT

Y

UK G

ILTS

MAN

AGED

LIQ

UIDI

TY

UK E

QUIT

Y IN

COM

EUK

MID

CAP

EQU

ITY

UK S

MAL

L CA

P EQ

UITY

US E

QUIT

Y

US E

QUIT

Y SM

ALL

CAP

EURO

PE E

X UK

EQU

ITY

PACI

FIC

EX J

APAN

EQU

ITY

EMER

GIN

G M

ARKE

TS E

QUIT

YTA

RGET

ED R

ETUR

N


Portfolio Holdings as at 31 March 2018






Pimco GIS Global High Yield Bond


Evenlode Income

Neptune UK Mid Cap

Liontrust UK Smaller Companies


Dimensional US Small Companies

Jupiter European

Schroder Asian Income Maximiser


Aviva Inv Multi Strategy Target Income



M&G Optimal Income

Threadneedle High Yield Bond


Rathbone Income



L&G Pacific Index


Invesco Perpetual Global Targeted Returns

Royal London Sterling Credit


Trojan Income Dodge & Cox US Stock

Vontobel US Equity


UK IN

DEX

LIN

KED

GILT

S

UK C

ORPO

RATE

BON

DS

GLOB

AL S

TRAT

EGIC

BON

DS

GLOB

AL H

IGH

YIE

LD

BON

DS

UK G

ILTS

MAN

AGED

LIQ

UIDI

TY

The current portfolio holdings for PIM Strategic Guardian are shown in the tables below, as at 31 March 2018. Please refer to page 57 for details on fund changes over the period. If you have any further queries, please refer to your relationship manager.

UK M

ID C

AP E

QUIT

Y

UK S

MAL

L CA

P EQ

UITY

US E

QUIT

Y

US E

QUIT

Y SM

ALL

CAP

UK E

QUIT

Y IN

COM

E

UK P

ROPE

RTY

EURO

PE E

X UK

EQU

ITY

PACI

FIC

EX J

APAN

EQUI

TY

EMER

GIN

G M

ARKE

TS

EQUI

TY

TARG

ETED

RET

URN


PIM Strategic Guardian Portfolios G

PIM Strategic Guardian - Portfolio Returns to period end 31 March 2018

All portfolios continue to perform in line with their relative risk over 3 months (with the exception of Risk Grade 8) and since inception owing to the strong relative performance of Managed Liquidity, UK Gilts and Property over the former period and UK Small Casp, US Small Cap, Pacific ex Japan and Emerging Markets Equity over the latter. Over 6 months and 1 year, performance is distorted by the outperformance of UK Gilts, UK I/L Gilts, Property and UK Small Cap Equity over 6 months, and UK Small Cap, Europe Ex-UK and Emerging Markets Equity over 1 year.

3 M

ONTH

RET

URN

Risk Grade

1 -0.17% 0.38% 0.94% 3.41%

2 -0.60% 0.25% 0.91% 5.21%

3 -1.27% -0.15% 0.68% 6.83%

4 -1.84% -0.34% 1.89% 11.06%

5 -2.44% -0.77% 1.57% 12.99%

6 -2.63% -0.61% 1.89% 15.99%

7 -2.75% -0.35% 2.75% 20.39%

8 -2.62% 0.42% 4.22% 26.55%

9 -2.89% 0.34% 4.47% 28.79%

10 -3.31% 0.29% 4.77% 32.82%

PIM Strategic Guardian - Asset Class Returns to period end 31 March 2018

The PIM Strategic Guardian portfolios are built through a weighted exposure to sixteen underlying asset classes. For transparency purposes the returns of each sub-asset class are given below. These returns should not be considered in isolation as the asset class risk and return characteristics are taken into account within the construction of each risk graded portfolio.

FROM

INCE

PTIO

N

(03.

05.2

016)

3 M

ONTH

RET

URN

Asset Class

Managed Liquidity 0.10% 0.17% 0.28% 0.61%

UK Gilts 0.39% 2.61% 0.70% 8.34%

UK Index Linked Gilts -0.76% 2.87% -0.34% 21.59%

UK Corporate Bonds -1.21% 0.62% 2.34% 9.46%

Global Strategic Bonds -0.50% 0.28% 2.21% 8.86%

Global High Yield Bonds -0.98% -0.60% 3.13% 11.79%

UK Property 1.23% 3.96% 7.51% 8.67%

UK Equity Income -5.52% -4.19% -3.77% 10.23%

UK Mid Cap Equity -6.31% -6.07% 1.47% 16.85%

UK Small Cap Equity -0.41% 5.17% 17.12% 43.28%

US Equity -4.95% -1.00% -3.15% 31.22%

US Equity Small Cap -5.12% -2.39% -2.60% 38.05%

Europe ex UK Equity -3.50% -0.75% 12.73% 30.87%

Pacific ex Japan Equity -3.83% 1.46% 2.50% 40.31%

Emerging Markets Equity -3.35% 2.04% 10.04% 45.91%

Targeted Return -1.13% -1.41% -1.81% -0.89%


6 M

ONTH

RET

URN 6 M

ONTH

RET

URN

FROM

INCE

PTIO

N

(03.

05.2

016)


1 YE

AR R

ETUR

N 1 YE

AR R

ETUR

N


PIM Strategic Active Portfolios

The PIM Strategic Active portfolios are constructed using six asset classes each with their own distinctive risk and reward characteristics. By varying the percentage exposure to each asset class, ten Risk Graded portfolios are produced that can match the risk tolerance of a particular client. The current split between the asset classes for each of the ten Risk Graded portfolios is detailed in the table below. An investor in the PIM Strategic Active solution assumes that the risk and return relationships between the various asset classes are stable over the long term. Thus, the asset allocations for the ten Risk Graded portfolios will not change frequently.

PIM Strategic Active Portfolios - Asset Allocation Table

PIM Strategic Active - Model Portfolio Holdings as at 31 March 2018

Risk Grade

1 80% 20% 0% 0% 0% 0% 100%

2 25% 55% 10% 5% 5% 0% 100%

3 15% 55% 10% 10% 10% 0% 100%

4 15% 35% 10% 25% 15% 0% 100%

5 5% 30% 15% 25% 25% 0% 100%

6 0% 25% 15% 25% 25% 10% 100%

7 0% 10% 15% 25% 35% 15% 100%

8 0% 0% 15% 20% 35% 30% 100%

9 0% 0% 10% 20% 30% 40% 100%

10 0% 0% 0% 0% 35% 65% 100%

EQUI

TY IN

COM

E

PROP

ERTY

FIXE

D IN

TERE

ST

MAN

AGED

LIQ

UIDI

TY

EQUI

TY G

ROW

TH

GLOB

AL A

LPH

A


Fund OCF 0.10% 0.59% 0.72% 0.86% 0.83% 0.87%

Historic Yield 0.22% 2.54% 3.23% 3.72% 1.08% 0.76%

Federated- Short-Term Sterling Prime

Allianz Gilt Yield Threadneedle UK Property Authorised Trust Feeder

MI Chelverton UK Equity Income


Franklin UK Managers' Focus




Unicorn UK Income LF Lindsell Train UK Equity

Old Mutual North American Equity



Trojan Income Investec UK Alpha JOHCM Continental European


Rathbone Income Jupiter UK Special Situations

Baillie Gifford Japanese


Threadneedle UK Equity Income

Vontobel US Equity Schroder Asian Alpha Plus


Evenlode Income Fidelity American Special Situations

JPM Emerging Markets Small Cap

M&G Optimal Income LF Miton UK Multi Cap Income


Fidelity Global Dividend


Artemis Global Income

Jupiter European




Schroder Tokyo


Veritas Asian



Rathbone Global Opportunities

S

PROP

ERTY

EQUI

TY

INCO

ME

EQUI

TY

GROW

TH

GLOB

AL

ALPH

A

FIXE

D

INTE

REST

MAN

AGED

LI

QUID

ITY

The current portfolio holdings for PIM Strategic Active are shown in the table below, as at 31 March 2018. Please refer to page 57 for further details on fund changes over the period. If you have any further queries, please refer to your relationship manager.


Portfolios are rebalanced to their asset allocation on a quarterly basis.

TOTA

L


PIM Strategic Active - Portfolio Returns to period end 31 March 2018 PIM Strategic Active - Asset Class Returns to period end 31 March 2018

All portfolios continue to perform in line with their relative risk over 3 months, 2, 3 and 5 years (with the exception of Risk Grade 9 over 5 years) owing to the relative outperformance of defensive assets over 3 months and Equity Growth and Global Alpha over longer periods. Over 6 months and 1 year, performance has been distorted by strong relative returns in Property and Global Alpha, which more typically sit at opposite ends of the risk spectrum.

6 M

ONTH

RET

URN

1 YE

AR R

ETUR

N

2 YE

AR R

ETUR

N

3 YE

AR R

ETUR

N

5 YE

AR R

ETUR

N

3 M

ONTH

RET

URN

The PIM Strategic Active Risk Graded portfolios are built through a weighted exposure to six underlying asset classes. For transparency purposes the returns of each asset class are given below. These returns should not be considered in isolation as the asset class risk and return characteristics are taken into account within the construction of each risk graded portfolio.

6 M

ONTH

RET

URN

1 YE

AR R

ETUR

N

2 YE

AR R

ETUR

N

3 YE

AR R

ETUR

N

5 YE

AR R

ETUR

N

3 M

ONTH

RET

URN

Risk Grade Asset Class


1 -0.06% 0.30% 0.56% 2.57% 2.39% 5.98%

2 -0.74% 0.71% 1.93% 8.80% 9.57% 20.10%

3 -1.24% 0.54% 2.09% 11.05% 12.04% 25.21%

4 -2.15% -0.15% 1.92% 12.92% 14.40% 31.33%

5 -2.48% 0.02% 2.57% 15.77% 17.99% 39.12%

6 -2.88% 0.07% 3.00% 19.05% 20.80% 43.49%

7 -3.41% 0.03% 3.40% 22.52% 24.29% 50.19%

8 -3.72% 0.27% 4.03% 26.52% 27.39% 54.04%

9 -4.01% 0.16% 3.98% 28.54% 28.17% 53.56%

10 -4.32% 0.76% 4.80% 36.16% 32.74% 55.95%


Fixed Interest -0.72% 0.81% 1.69% 10.21% 9.68% 18.60%

Property 1.27% 3.85% 7.41% 6.45% 15.31% 41.85%

Equity Income -5.62% -3.57% -0.35% 16.11% 17.71% 44.55%

Equity Growth -4.18% 0.31% 3.98% 30.89% 32.94% 66.74%

Global Alpha -4.40% 1.00% 5.23% 39.05% 32.55% 50.23%

*Prior to 16 February 2015 the returns shown as Global Alpha were synonymous with Specialist Equity.



PIM Tactical Active & Passive Portfolios

The Tactical offering is built around five asset classes; Managed Liquidity, Cautious, Balanced, Active and Global Alpha. The Managed Liquidity and Global Alpha portfolios are the same as PIM Strategic Active portfolios. The asset allocation between bonds, equities and other asset classes may vary within the Cautious, Balanced and Active portfolios, at the discretion of the investment manager (PIM). The aim is to minimise volatility whilst maximising risk adjusted returns.

These five asset class portfolios are blended to give ten Risk Graded portfolios, as shown below. The Tactical Passive investment solution seeks to replicate the asset allocation of Tactical Active via the use of passive funds. The exceptions are Managed Liquidity and Property where passive alternatives are unavailable. Global Alpha has the same sub-asset allocations for Active and Passive, however is labelled Active Plus in the latter.

PIM Tactical Portfolios Active and Passive - Asset Allocation Table

Portfolios are rebalanced to their asset allocation on a periodic basis.

BALA

NCE

D

ACTI

VE

ACTI

VE P

LUS

CAUT

IOUS

MAN

AGED

LIQ

UIDI

TY

PIM Tactical Passive

BALA

NCE

D

ACTI

VE

GLOB

AL A

LPH

A

INCO

ME

CAUT

IOUS

MAN

AGED

LIQ

UIDI

TY

Fund OCF 0.10% 0.56% 0.75% 0.86% 0.87% 0.79%

Historic Yield 0.22% 1.86% 1.80% 1.41% 0.76% 3.94%

Fund OCF 0.10% 0.15% 0.14% 0.18% 0.09%

Historic Yield 0.22% 1.81% 2.52% 2.41% 2.00%

T



PIM Tactical Active

Risk Grade

1 50% 50% 0% 0% 0% 100%

2 25% 75% 0% 0% 0% 100%

3 0% 100% 0% 0% 0% 100%

4 0% 75% 25% 0% 0% 100%

5 0% 25% 75% 0% 0% 100%

6 0% 0% 100% 0% 0% 100%

7 0% 0% 75% 25% 0% 100%

8 0% 0% 25% 75% 0% 100%

9 0% 0% 0% 100% 0% 100%

10 0% 0% 0% 75% 25% 100%

BALA

NCE

D

ACTI

VE

GLOB

AL A

LPH

A



MAN

AGED

LIQ

UIDI

TY

CAUT

IOUS

TOTA

L


PIM Tactical Active (Cautious, Balanced and Active) - Portfolio Holdings*

CAUT

IOUS

BALA

NCE

D

ACTI

VE

FUN

D

ASSE

T CL

ASS

Managed Liquidity Federated Short-Term Sterling Prime 7.50% 0.00% 0.00% 0.00%

BlackRock ICS Institutional Sterling Liquidity 7.50% 0.00% 0.00% 0.00%

Fixed Interest Vanguard UK Government Bond Index 16.87% 6.63% 0.00% 0.00%

L&G All Stocks Index Linked Gilt Index 5.50% 2.50% 0.00% 0.00%

Vanguard UK Investment Grade Bond Index 9.63% 4.37% 0.00% 0.00%

Vanguard Global Bond Index Hedge 22.00% 10.00% 0.00% 0.00%

Property L&G UK Property Feeder 3.34% 3.34% 3.34% 0.00%

Threadneedle UK Property Authorised Trust Feeder 3.33% 3.33% 3.33% 0.00%

Standard Life Investments UK Real Estate Income Feeder 3.33% 3.33% 3.33% 0.00%

UK Equities Vanguard FTSE UK All Share Index 12.00% 35.00% 25.00% 7.90%

International Equities Vanguard US Equity Index 3.00% 15.00% 21.00% 51.60%

Vanguard FTSE Developed Europe ex UK Equity Index 2.00% 6.50% 8.25% 18.20%

L&G Japan Index 0.75% 3.75% 4.00% 8.20%

L&G Pacific Index 0.25% 1.25% 1.75% 6.75%

Emerging Markets Vanguard Emerging Markets Stock Index 3.00% 5.00% 30.00% 7.35%

Total 100% 100% 100% 100%

Managed Liquidity Federated Short-Term Sterling Prime 7.50% 0.00% 0.00%

BlackRock ICS Institutional Sterling Liquidity 7.50% 0.00% 0.00%

Fixed Interest Allianz Gilt Yield 16.87% 6.63% 0.00%

M&G Index Linked Bond 5.50% 2.50% 0.00%

BlackRock Corporate Bond 4.82% 2.19% 0.00%

Fidelity Moneybuilder Income 4.81% 2.18% 0.00%

Goldman Sachs Global Fixed Income Plus Portfolio 7.33% 3.33% 0.00%

Jupiter Strategic Bond 7.33% 3.33% 0.00%

M&G Optimal Income 7.34% 3.34% 0.00%

Property L&G UK Property Feeder 3.34% 3.34% 3.34%

Threadneedle UK Property Authorised Trust Feeder 3.33% 3.33% 3.33%

Standard Life Investments UK Real Estate Income Feeder 3.33% 3.33% 3.33%

UK Equities LF Lindsell Train UK Equity 4.00% 11.66% 8.33%

Jupiter UK Special Situations 4.00% 11.67% 8.33%

Liontrust Special Situations 4.00% 11.67% 8.34%

International Equities Vontobel US Equity 0.75% 3.75% 5.25%

Fidelity American Special Situations 0.75% 3.75% 5.25%

Pioneer SICAV US Fundamental Growth 0.75% 3.75% 5.25%

Dodge & Cox US Stock 0.75% 3.75% 5.25%

Threadneedle European Select 0.67% 2.17% 2.75%

Jupiter European 0.67% 2.17% 2.75%

FP CRUX European Special Situations 0.66% 2.16% 2.75%

LF Morant Wright Nippon Yield 0.37% 1.87% 2.00%

Schroder Tokyo 0.38% 1.88% 2.00%

Stewart Investors Asia Pacific Leaders 0.12% 0.62% 0.87%

Veritas Asian 0.13% 0.63% 0.88%

Fidelity Emerging Markets 0.75% 1.25% 7.50%

GS Emerging Markets Equity Portfolio 0.75% 1.25% 7.50%

Schroder Global Emerging Markets 0.75% 1.25% 7.50%

MI Somerset Emerging Markets Dividend Growth 0.75% 1.25% 7.50%

Total 100% 100% 100%

PIM Tactical Passive (Cautious, Balanced and Active) - Portfolio Holdings*

*The current portfolio holdings for PIM Tactical (Active and Passive) are shown in the tables above, as at 31 March 2018. Please refer to page 57 for details on fund changes over the period. If you have any further queries, please refer to your relationship manager.


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PIM Tactical Active - Portfolio Returns to period end 31 March 2018

All portfolios continue to perform in line with their relative risk over 3 months, 1, 2, 3 and 5 years (with the exception of Risk Grade 10 over 1 and 5 years) owing to the strong relative returns of Managed Liquidity and Cautious over 3 months and Tatical Active and Global Alpha over longer periods. Over 6 months performance is distorted by the outperformance of Cautious and Active which typically sit at opposite ends of the risk spectrum.

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Risk Grade

PIM Tactical Active - Portfolio Returns PIM Tactical Passive - Portfolio Returns

All portfolios continue to perform in line with their relative risk over 3 months, 1, 2, 3 and 5 years (with the exception of Risk Grade 10 over 1 year) owing to the strong relative returns of Managed Liquidity and Cautious over 3 months and Tatical Active and Active Plus over longer periods (and Balanced over 1 year). Over 6 months performance is distorted by the outperformance of Cautious and Active which typically sit at opposite ends of the risk spectrum.

1 -0.40% 0.66% 1.52% 5.96% 6.54% 14.83%

2 -0.65% 0.91% 2.15% 8.67% 9.61% 21.20%

3 -0.90% 1.15% 2.77% 11.41% 12.72% 27.85%

4 -1.39% 1.05% 2.95% 13.55% 14.98% 32.22%

5 -2.38% 0.83% 3.29% 17.91% 19.55% 41.28%

6 -2.87% 0.72% 3.46% 20.14% 21.86% 45.99%

7 -3.03% 0.82% 3.97% 22.84% 23.80% 48.03%

8 -3.37% 1.03% 4.99% 28.38% 27.65% 52.07%

9 -3.54% 1.12% 5.49% 31.21% 29.56% 54.05%

10 -3.76% 1.05% 5.32% 33.10% 30.29% 53.09%

1 -0.46% 0.62% 1.25% 5.42% 5.89% 14.13%

2 -0.74% 0.85% 1.73% 7.83% 8.60% 20.10%

3 -1.01% 1.08% 2.21% 10.26% 11.34% 26.31%

4 -1.63% 0.88% 2.34% 12.76% 13.32% 29.71%

5 -2.86% 0.47% 2.57% 17.87% 17.30% 36.65%

6 -3.46% 0.27% 2.69% 20.49% 19.29% 40.19%

7 -3.53% 0.51% 3.32% 23.74% 21.46% 42.67%

8 -3.66% 1.00% 4.57% 30.40% 25.79% 47.55%

9 -3.72% 1.24% 5.19% 33.82% 27.94% 49.95%

10 -4.03% 0.73% 3.90% 35.17% 31.34% 52.50%

3 YE

AR R

ETUR

N

Please refer to Important Notes on page 4 for how performance figures are calculated. Performance data is correct as of 03 April 2018. Past performance is not an indication of future returns. The value of investments and any income from them is not guaranteed and can go down as well as up. Please refer to Important Notes on page 4 for how performance figures are calculated. Performance data is correct as

of 03 April 2018. Past performance is not an indication of future returns. The value of investments and any income from them is not guaranteed and can go down as well as up.

Risk Grade


PIM Tactical Active & Passive - Asset Class Returns to period end 31 March 2018

The PIM Tactical Risk Graded portfolios are built through a weighted exposure to the five underlying asset classes. For transparency purposes the returns of each asset class are given below. These returns should not be considered in isolation as the asset class risk and return characteristics are taken into account within the construction of each risk graded portfolio.

PIM Tactical Active and Passive Portfolios T

*Prior to 16 February 2015 the returns shown as Global Alpha were synonymous with Specialist Equity.


PIM Tactical Active PIM Tactical Passive


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PIM Tactical Active PIM Tactical Passive

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PIM Tactical Active: Cautious -0.90% 1.15% 2.77% 11.41% 12.72% 27.85%

IA Mixed Investment 20-60% Shares -3.15% -0.95% 0.83% 13.84% 11.05% 24.96%

PIM Tactical Active: Balanced -2.87% 0.72% 3.46% 20.14% 21.86% 45.99%


PIM Tactical Active: Active -3.54% 1.12% 5.49% 31.21% 29.56% 54.05%

IA Flexible Investment -3.96% -0.48% 2.36% 21.86% 16.64% 36.15%

PIM Tactical Active: Global Alpha -4.40% 1.00% 5.23% 39.05% 32.55% 50.23%

FTSE World -4.43% 0.32% 2.55% 36.30% 36.30% 74.27%


PIM Tactical Passive: Cautious -1.01% 1.08% 2.21% 10.26% 11.34% 26.31%


PIM Tactical Passive: Balanced -3.46% 0.27% 2.69% 20.49% 19.29% 40.19%


PIM Tactical Passive: Active -3.72% 1.24% 5.19% 33.82% 27.94% 49.95%


PIM Tactical Passive: Active Plus -4.34% 0.22% 2.62% 36.49% 34.75% 55.00%

FTSE World -4.43% 0.32% 2.55% 36.30% 36.30% 74.27%


PIM Tactical Active Income - Portfolio Returns to period end 31 March 2018

The Tactical Active Income portfolio invests in a combination of Managed Liquidity, Fixed Interest, Property and Equity Income collectives with the aim of providing a yield between 10% and 20% greater than that of the broad UK stock market, which is currently 3.85%. The mix of asset classes will be varied by the investment manager (PIM) depending upon their risk and return characteristics. Given the unique character of the portfolio, Tactical Income does not easily fit within any of the IA sector definitions and there is no natural benchmark for performance comparisons. However, in the table below are some of the common benchmarks for reference purposes.

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PIM Tactical Active Income -2.68% -0.69% 2.50% 12.63% 15.08% 35.12%

Citi UK Government Bond Index

-1.86% 0.29% -1.55% 5.43% 8.94% 22.01%

IA Sterling Corporate Bond Sector

-1.33% 0.48% 1.70% 10.73% 9.59% 22.81%

IA UK Equity Income Sector -6.11% -3.25% 0.29% 15.47% 14.07% 40.95%

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PIM Tactical Active & Passive - Portfolio Volatility Against Comparable Indices

For Active and Passive models, Cautious, Balanced and Active have all delivered a higher absolute return and relative return per unit of risk, than their respective IA Mixed Investment sector average, over 1 and 3 years. For Tactical Cautious and Balanced, this has also been delivered with a lower volatility over all periods (with the exception of Tactical Passive Balanced over 1 year).

3 YE

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PIM Tactical Active: Cautious 2.77% 2.77% 1.00x 4.08% 3.49% 1.17x

PIM Tactical Passive: Cautious 2.21% 3.10% 0.71x 3.65% 3.75% 0.97x

IA Mixed Investment 20-60% Shares

0.83% 3.78% 0.22x 3.55% 5.28% 0.67x

PIM Tactical Active: Balanced 3.46% 4.86% 0.71x 6.88% 6.12% 1.12x

PIM Tactical Passive: Balanced 2.69% 5.56% 0.48x 6.05% 6.49% 0.93x


1.54% 5.29% 0.29x 4.90% 7.06% 0.69x

PIM Tactical Active: Active 5.49% 6.75% 0.81x 9.12% 8.76% 1.04x

PIM Tactical Passive: Active 5.19% 7.43% 0.70x 8.56% 9.35% 0.92x

IA Flexible Investment 2.36% 5.69% 0.41x 5.27% 7.74% 0.68x




PIM Tactical Active Income % Asset Allocation as of 31 March 2018

The PIM Tactical Active Income portfolios have a target yield of between 10% and 20% above the UK Equity Market.

49.5%

FIXED INTEREST

EQUITY INCOME

PROPERTY

18%

32.5%

PIM Tactical Active Income Portfolio Holdings as at 31 March 2018


PIM Tactical Active and Passive Portfolios T

Fixed Interest M&G Index Linked Bond 2.50%

Invesco Perpetual Corporate Bond 10.00%

M&G Optimal Income 6.67%

Jupiter Strategic Bond 6.67%

PIMCO Global Bond 6.66%

Property L&G UK Property Feeder 6.00%

Threadneedle UK Property Authorised Trust Feeder 6.00%

Standard Life Investments UK Real Estate Income Feeder 6.00%

Equity Income MI Chelverton UK Equity Income 7.28%

Unicorn UK Income 3.64%

LF Miton UK Multi Cap Income 3.64%

Trojan Income 7.28%

Rathbone Income 7.28%

Schroder Income Maximiser 7.29%

Fidelity Enhanced Income 7.29%

Fidelity Global Dividend 3.20%

Artemis Global Income 2.60%

Total 100%

TACT

ICAL

IN

COM

E

FUN

D

ASSE

T CL

ASS

The current portfolio holdings for PIM Tactical Active Income are shown in the table below, as at 31 March 2018. Please refer to page 57 for details on fund changes over the period. If you have any further queries, please refer to your relationship manager.


PIM Tactical Income Solution

The PIM Tactical Income portfolios aim to deliver a set of target yields while controlling the level of portfolio volatility. Parmenion will use tactical asset allocation to both achieve the target yields and to keep portfolio volatility within the constraints identified for each risk grade.

The PIM Tactical Income portfolios have, as their name suggests, the flexibility to adopt tactical asset allocations. This means the investment manager (PIM) has the capability to alter the asset allocation of the portfolios in light of changing market conditions.

This flexibility enhances PIM’s ability to increase allocations to income generating assets to meet the target yields, when it is prudent to do so, while simultaneously managing the portfolios’ volatility and exposure to risk. All changes to asset allocation are made within prescribed limits only.

Key Benefits

• 10 Risk Graded Portfolios

• Rising target yields, rising from 3% to 5.25%

• Tactical asset allocation to make the targeted yields achievable

• Proactive blending of Passive and Active funds

• Natural income arises periodically, not evenly, and can be paid as it arises

• Controlled use of Maximiser Funds.

What are Maximiser Funds?

Up to 35% of a PIM Tactical Income portfolio may be invested in Maximiser Funds to help ensure an attractive level of income. It is important that clients understand this. A Maximiser Fund is a portfolio of stocks in which the fund manager has a high level of conviction.

Derivatives contracts are written on a select number of underlying companies, carefully managed by a derivatives specialist, generating additional income in return for giving up some potential return on a stock above the level specified in the contract. In this way, Maximiser Funds can generate an income greater than that achieved by only investing in stocks.

Tactical Asset Allocation

Parmenion has designed the PIM Tactical Income portfolios using a range of neutral strategic asset allocations as its starting point. These strategic asset allocations are based around the performance and volatilities of various asset class indices over a 20 year period and combined with a qualitative overlay to ensure diversification. As market conditions change over time, so do the relative volatility and valuations of different asset classes.

When prudent to do so, the PIM Tactical Income portfolio asset allocations can adapt to ensure that target yields are achieved with the least anticipated risk and within the acceptable range of volatility for each particular risk grade.

TI


PIM Tactical Income Portfolios - Historic Yield, Fund OCF and Return Data


Please note, the Annualised Return, Standard Deviation, Maximum Loss and Gain figures are based on the simulated returns, of the portfolio’s neutral asset weightings over the last 20 years to December 2016. Figures are based on indices and therefore exclude the effect of taxes or fees from Parmenion or the Adviser. Charges are however taken from portfolio liquidity and therefore will not affect the income distributed.

Risk Grade

1 3.00% 2.37% 4.45% 2.31% -6.59% 14.53% 0.51%

2 3.25% 3.06% 5.70% 4.04% -13.69% 23.63% 0.59%

3 3.50% 3.63% 6.66% 5.56% -17.92% 31.96% 0.65%

4 3.75% 3.99% 7.34% 6.77% -21.75% 37.70% 0.69%

5 4.00% 4.26% 7.82% 7.87% -24.81% 41.94% 0.71%

6 4.25% 4.46% 8.08% 9.27% -27.25% 45.06% 0.72%

7 4.50% 4.63% 8.26% 10.34% -29.32% 47.24% 0.73%

8 4.75% 4.88% 8.45% 11.50% -31.81% 49.81% 0.74%

9 5.00% 5.11% 8.63% 12.77% -34.25% 52.44% 0.74%

10 5.25% 5.26% 8.63% 13.84% -35.46% 54.56% 0.74%

HIS

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The current fund holdings for PIM Tactical Income portfolios are shown in the table below, as at 31 March 2018. Please refer to page 57 for details on fund changes over the period. If you have any further queries, please refer to your relationship manager.

Asset Group Holdings 1 2 3 4 5 6 7 8 9 10

Managed Liquidity Dimensional Global Ultra Short Fixed Income 18.34% 11.67% 5.00% 1.67% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

AXA Sterling Credit Short Duration Bond 18.33% 11.67% 5.00% 1.67% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

M&G Short Dated Corporate Bond 18.33% 11.66% 5.00% 1.66% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Corporate Bonds Fidelity Moneybuilder Income 7.50% 7.50% 11.25% 11.25% 10.00% 7.50% 5.00% 2.50% 0.00% 0.00%

M&G Corporate Bond 7.50% 7.50% 11.25% 11.25% 10.00% 7.50% 5.00% 2.50% 0.00% 0.00%

Jupiter Strategic Bond 7.50% 7.50% 11.25% 11.25% 10.00% 7.50% 5.00% 2.50% 0.00% 0.00%

PIMCO Global Bond 3.75% 3.75% 5.62% 5.62% 5.00% 3.75% 2.50% 1.25% 0.00% 0.00%

M&G Optimal Income 3.75% 3.75% 5.63% 5.63% 5.00% 3.75% 2.50% 1.25% 0.00% 0.00%

High Yield Bonds Schroder High Yield Opportunities 0.00% 0.00% 1.00% 1.50% 2.00% 3.00% 3.50% 4.00% 4.50% 5.00%

Threadneedle High Yield Bond 0.00% 0.00% 1.00% 1.50% 2.00% 3.00% 3.50% 4.00% 4.50% 5.00%

Property Janus Henderson UK Property Feeder 3.09% 4.13% 3.09% 3.09% 3.09% 2.06% 2.06% 2.06% 2.06% 0.00%

L&G UK Property Feeder 3.09% 4.13% 3.09% 3.09% 3.09% 2.06% 2.06% 2.06% 2.06% 0.00%

Threadneedle UK Property Authorised Trust Feeder 6.19% 8.25% 6.19% 6.19% 6.19% 4.13% 4.13% 4.13% 4.13% 0.00%

UK Equity Income Rathbone Income 0.00% 1.00% 1.50% 1.90% 2.20% 2.60% 2.90% 3.30% 3.50% 3.80%

Trojan Income 0.00% 1.00% 1.50% 1.90% 2.20% 2.60% 2.90% 3.30% 3.50% 3.80%

Artemis Income 0.00% 1.00% 1.50% 1.90% 2.20% 2.60% 2.90% 3.30% 3.50% 3.80%

Vanguard FTSE UK Equity Income Index 0.00% 3.50% 5.25% 6.65% 7.70% 9.10% 10.15% 11.55% 12.25% 13.30%

Fidelity Enhanced Income 0.00% 1.75% 2.62% 3.32% 3.85% 4.55% 5.07% 5.77% 6.12% 6.65%

Schroder Income Maximiser 0.00% 1.75% 2.63% 3.33% 3.85% 4.55% 5.08% 5.78% 6.13% 6.65%

US Equity JPM US Equity Income 0.00% 1.00% 1.50% 2.00% 2.50% 3.50% 4.00% 3.50% 3.00% 2.50%

Aviva Investors US Equity Income II 0.00% 1.00% 1.50% 2.00% 2.50% 3.50% 4.00% 3.50% 3.00% 2.50%

Europe ex UK Standard Life Investments European Equity Income 0.00% 1.00% 2.00% 3.00% 4.00% 6.00% 7.00% 8.00% 10.00% 12.00%

Asia Pacific ex Japan L&G Pacific Index 0.00% 0.00% 0.00% 0.67% 1.67% 2.67% 3.33% 4.33% 5.67% 6.67%

Janus Henderson Asian Dividend Income 0.00% 0.00% 0.00% 0.66% 1.66% 2.66% 3.33% 4.33% 5.66% 6.66%

Schroder Asian Income Maximiser 0.00% 0.00% 0.00% 0.67% 1.67% 2.67% 3.34% 4.34% 5.67% 6.67%

Global Maximiser Schroder ISF Global Dividend Maximiser 1.97% 4.11% 4.22% 4.97% 5.72% 6.56% 8.06% 9.56% 11.06% 11.25%

Fidelity Global Enhanced Income 0.66% 1.38% 1.41% 1.66% 1.91% 2.19% 2.69% 3.19% 3.69% 3.75%

Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%


PIM Tactical Income - Portfolio Returns to period end 31 March 2018

Risk Grades 3 to 10 have continued to meet or exceed their income targets over the last 12 months. From a total return perspective, all portfolios have performed in line with their relative risk over all periods (except Risk Grade 9 over 1 year) owing to the relative outperformance of defensive assets over 3 months to 1 year and Developed Markets Equity over 2 years to since inception. The exceptions are Asia Pacific ex Japan which has also performed well over 6 months and 1 year and Europe ex-UK which similarly has also performed well over 1 year.

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Risk Grade

1 -0.43% 0.55% 1.76% 6.17% 6.53% 14.19%

2 -1.29% 0.17% 1.57% 8.64% 8.92% 19.27%

3 -1.87% -0.17% 1.45% 10.77% 10.57% 22.98%

4 -2.34% -0.37% 1.37% 12.65% 12.22% 26.24%

5 -2.76% -0.55% 1.27% 14.41% 13.77% 29.38%

6 -3.40% -1.02% 0.76% 16.27% 15.28% 32.04%

7 -3.80% -1.25% 0.52% 17.57% 16.44% 34.34%

8 -4.13% -1.45% 0.41% 18.86% 17.41% 36.20%

9 -4.42% -1.57% 0.45% 20.59% 18.74% 38.50%

10 -4.85% -2.02% 0.03% 21.85% 19.18% 39.12%

PIM Tactical Income Solution TI

PIM Tactical Income - Asset Class Returns to period end 31 March 2018

The PIM Tactical Income Risk Graded portfolios are built through a weighted exposure to nine underlying asset classes. For transparency purposes the returns of each asset class are given below. These returns should not be considered in isolation as the asset class risk and return characteristics are taken into account within the construction of each Risk Graded portfolio.

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Asset Class

Managed Liquidity -0.39% -0.12% 0.32% 2.55% 2.95% 5.25%

Corporate Bonds -0.91% 0.45% 2.23% 10.09% 8.96% 20.23%

High Yield Bonds -0.19% 0.86% 5.30% 17.27% 19.07% 23.72%

Property 1.42% 4.11% 7.61% 7.87% 10.48% 28.39%

UK Equity Income -6.43% -4.28% -3.39% 10.57% 8.71% 22.93%

US Equity -8.20% -3.30% -6.63% 23.69% 27.95% 64.89%

Europe ex UK -4.37% -3.25% 4.23% 27.08% 24.53% 45.21%

Asia Pacific ex Japan -3.83% 1.30% 3.18% 37.31% 29.21% 57.90%

Global Equity Income Maximiser -4.55% -1.19% -0.58% 28.15% 23.31% 49.71%

FROM

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2 YE

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3 YE

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PIM Strategic Ethical Active Portfolios: Profile A-D

What is Ethical Investing?

Ethical investment is known by a variety of terms including: ‘Green investment’, ‘Socially responsible investment’ (SRI) and ‘Sustainable finance’. All of these terms refer to financial or investment services which strive to maximise investment performance and social welfare. In general, ethical investment looks to encourage corporate practices that promote environmental stewardship, consumer protection, human rights and diversity, although additional criteria such as the avoidance of weapons, alcohol, tobacco, gambling and pornography are often included as legitimate areas of concern. These criteria can be broadly summarised as environmental, social justice and corporate governance issues or ESG criteria.

What are the benefits of Investing Ethically?

Ethical investment provides the opportunity to invest in ethically sound investment solutions that cater for a range of ethical preferences. It gives investors the option to avoid companies that engage in activities that they could not usually support, and proactively invest in companies that recognise their corporate responsibilities. Investing ethically is now one of the fastest growing areas in financial services with funds under management having grown to approximately $8.72 trillion in the United States alone (Source: http://ussif.org).

Solution Description

The PIM Strategic Ethical Active Investment Solution offers the discretionary management of active funds across up to eight distinct asset class groups. There is an independent ethical overlay provided by the Ethical Oversight Committee, which includes Julian Parrott and Julia Dreblow. Both Julian and Julia are ethical specialists, with over 20 years experience in ethical investing, previously holding the positions of Chair of the EIA and Director of UKSIF, respectively.

Each asset class is populated with funds according to their Ethical Profile and risk adjusted returns. Incorporated within the solution are four Ethical Profiles (A to D) and ten Risk Graded portfolios (1 to 10), which are designed to capture the majority of clients’ ethical preferences and values. The Ethical Portfolio Selector is available to assist Advisers in identifying the appropriate Ethical Profile for their client.

Armaments (Strategic) P P P P

Pornography (Production) P P P P

Human Rights (Evidenced/Country Based) P P P P

Environmental Management / Technology** P P P P

Animal Testing (Non-Medical) P P P P

Tobacco (Production) P P P P

Environmental Impact P P P

Gambling P P

Alcohol Production P

Nuclear (Power) P

ETH

ICAL

PRO

FILE

A

(LIM

ITS

EXPO

SURE

* )

ETH

ICAL

CR

ITER

IA

Ethical Screening Criteria by Ethical Profile

SE

*Exposure to ethical criteria is likely to be limited by the responsible approach to environmental, social and governance issues adopted in Ethical Profiles A and B.**Ethical Profiles C and D only invest in funds which include the specified ethical criteria, as defined by the Ethical Oversight Committee.

Note. Avoidance criteria does not always mean ‘zero involvement’ as most ethical funds have de minimis limits which allow for limited (normally non-manufacturing or wholesale related) exposure to excluded areas. This allows funds to be manageable and support otherwise positive larger companies.

ETH

ICAL

PRO

FILE

B

(LIM

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EXPO

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* )

ETH

ICAL

PRO

FILE

C

(AIM

S TO

AVO

ID** )

ETH

ICAL

PRO

FILE

D

(AIM

S TO

AVO

ID** )


PIM Strategic Ethical Active - Asset Class Weightings as of 31 March 2018

The PIM Strategic Ethical Active portfolios are constructed using up to eight asset classes, each with their own distinctive risk and reward characteristics. Ten Risk Graded portfolios (1-10) are produced, by varying the percentage exposure to each asset class, to match the risk tolerance of a particular client. UK Government Bonds are currently excluded from Ethical Profiles B-D, whilst Ethical Profiles C-D also exclude Property due to the difficulties in screening the underlying tenants. The current split between the asset classes for each of the portfolios are detailed in the tables below. Strategic investors assume relatively constant long term risk and return characteristics and as such the underlying asset allocations will only vary where these have materially changed.

Asset Group 1 2 3 4 5 6 7 8 9 10

Managed Liquidity (Unscreened) 70.00% 45.00% 15.00% 5.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

UK Ethical Corporate Bonds 24.00% 28.00% 40.00% 40.00% 32.00% 24.00% 12.00% 4.00% 0.00% 0.00%

UK Government Bonds 6.00% 7.00% 10.00% 10.00% 8.00% 6.00% 3.00% 1.00% 0.00% 0.00%

UK Property 0.00% 10.00% 15.00% 15.00% 15.00% 10.00% 10.00% 10.00% 5.00% 0.00%

UK Ethical Equity Growth 0.00% 3.00% 6.00% 9.00% 15.00% 18.00% 21.00% 21.00% 24.00% 24.00%

UK Ethical Equity Income 0.00% 2.00% 4.00% 6.00% 10.00% 12.00% 14.00% 14.00% 16.00% 16.00%

International Ethical Equity 0.00% 5.00% 10.00% 15.00% 15.00% 20.00% 25.00% 30.00% 30.00% 30.00%

Ethical Emerging Markets Equity 0.00% 0.00% 0.00% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00%

PIM Strategic Ethical Active - Profile A

Asset Group 1 2 3 4 5 6 7 8 9 10



UK Property 0.00% 10.00% 15.00% 15.00% 15.00% 10.00% 10.00% 10.00% 5.00% 0.00%





PIM Strategic Ethical Active - Profile B


Asset Group 1 2 3 4 5 6 7 8 9 10







Asset Group 1 2 3 4 5 6 7 8 9 10







PIM Strategic Ethical Active - Profile C

PIM Strategic Ethical Active - Profile D

Portfolios in all profiles are rebalanced to their asset allocation on a periodic basis.



Fund OCF 0.10% 0.51% 0.65% 0.83% 0.64% 1.00%

Historic Yield 0.22% 3.66% 2.08% 3.72% 0.88% 0.37%

MAN

AGED

LIQ

UIDI

TYUK

ETH

ICAL

CO

RPOR

ATE

BON

DS

UK E

THIC

AL E

QUIT

Y

GROW

TH

UK E

THIC

AL E

QUIT

Y

INCO

ME

INTE

RNAT

ION

AL

ETH

ICAL

EQU

ITY


INTE

RNAT

ION

AL

ETH

ICAL

EQU

ITY

UK E

THIC

AL

CORP

ORAT

E BO

NDS


PIM Strategic Ethical Active - Profile BUK

GOV

ERN

MEN

T

BON

DS

UK P

ROPE

RTY

UK E

THIC

AL E

QUIT

Y

GROW

TH

UK E

THIC

AL E

QUIT

Y

INCO

ME

ETH

ICAL

EM

ERGI

NG

MAR

KETS

EQU

ITY

Fund OCF 0.10% 0.53% 0.76% 0.71% 0.83% 0.64% 1.00%

Historic Yield 0.22% 3.86% 3.16% 1.93% 3.72% 0.88% 0.37%

MAN

AGED

LIQ

UIDI

TY

UK E

THIC

AL E

QUIT

Y

GROW

TH

UK E

THIC

AL E

QUIT

Y

INCO

ME

INTE

RNAT

ION

AL

ETH

ICAL

EQU

ITY

ETH

ICAL

EM

ERGI

NG

MAR

KETS

EQU

ITY

Fund OCF 0.10% 0.48% 0.71% 0.83% 0.64% 1.00%

Historic Yield 0.22% 3.71% 1.93% 3.72% 0.88% 0.37%

MAN

AGED

LIQ

UIDI

TYUK

ETH

ICAL

CO

RPOR

ATE

BON

DSUK

ETH

ICAL

EQU

ITY

GROW

TH

UK E

THIC

AL E

QUIT

Y

INCO

ME

INTE

RNAT

ION

AL

ETH

ICAL

EQU

ITY

Ongoing Charge Figure (OCF) Net of Rebates and Historic Yield


Fund OCF 0.10% 0.53% 0.44% 0.76% 0.71% 0.83% 0.64% 1.00%

Historic Yield 0.22% 3.86% 0.62% 3.16% 1.93% 3.72% 0.88% 0.37%

MAN

AGED

LIQ

UIDI

TY

UK P

ROPE

RTY

UK E

THIC

AL

CORP

ORAT

E BO

NDS

ETH

ICAL

EM

ERGI

NG

MAR

KETS

EQU

ITY

ETH

ICAL

EM

ERGI

NG

MAR

KETS

EQU

ITY

PIM Strategic Ethical Active Portfolios SE






Illustration of the Impact of Ethical Screening on Portfolio Holdings as of 31 March 2018

PIM Strategic Ethical Active (A-D): Portfolio Holdings as of 31 March 2018*

The fund universe for each of the Ethical Profiles is determined by the Ethical Oversight Committee (EOC) as per the ethical screening criteria defined on page 32 of the QIR. The table below shows the current holdings for each Ethical Profile (A-D), to demonstrate the impact of the ethical screening on fund selection and for the purposes of transparency. Please note these holdings may change over the period, depending on the views of the investment manager (PIM). Details of any fund changes over the period, are available on page 57 of this document.

PROF

ILE

D

*Fund weightings are excluded, as it would depend upon the Risk Grade selected. For further information please contact your relationship manager.


Please refer to the Ethical Portfolio Selector and supporting documents for further information.

PROF

ILE

A

PROF

ILE

B

PROF

ILE

C

FUN

D

PROF

ILE

D

Asset Class

PROF

ILE

A

PROF

ILE

B

PROF

ILE

C

FUN

D

Asset Class

Managed Liquidity (unscreened) Federated Short-Term Sterling Prime


UK Ethical Corporate Bonds Rathbone Ethical Bond

Kames Ethical Corporate Bond

EdenTree Amity Sterling Bond

Liontrust Sustainable Future Corporate Bond

Royal London Ethical Bond

UK Government / Inflation Linked Bonds

Allianz Gilt Yield


UK Responsible Property Janus Henderson UK Property Feeder



UK Ethical Equity Growth Royal London Sustainable Leaders

EdenTree Amity UK

Liontrust Sustainable Future UK Growth

Premier Ethical

Liontrust UK Ethical

F&C - Responsible UK Equity Growth

Kames - Ethical Equity

UK Ethical Equity Income F&C Responsible UK Income

Janus Henderson UK Responsible Income

International Ethical Equity Janus Henderson Global Sustainable Equity

F&C Responsible Global Equity

Liontrust Sustainable Future Global Growth

Liontrust Sustainable Future European Growth

Ethical Emerging Market Equity

Stewart Investors Asia Pacific Sustainability

Vontobel mtx Sustainable Emerging Markets Leaders




PIM Strategic Ethical Active (Profile A-D): Portfolio Returns to period end 31 March 2018

All portfolios continue to perform in line with their relative risk over 3 months, 2, 3 and 5 years owing to the strong relative returns in defensive assets over 3 months, International and Emerging Markets Equity over 2 and 3 years, and UK, International and Emerging Markets Equity over 5 years. Over 6 months and 1 year, performance is distorted by the relative outperformance of defensive assets and International Equity over the former period and UK and International Equity over the latter.


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Risk Grade

1 -0.29% 0.48% 0.92% 4.42% 4.09% 11.21%

2 -0.68% 0.84% 2.37% 8.35% 9.03% 20.93%

3 -1.25% 1.10% 3.65% 13.27% 14.65% 30.83%

4 -1.70% 1.01% 4.23% 15.89% 17.39% 37.02%

5 -2.30% 0.83% 4.59% 17.95% 19.47% 42.25%

6 -2.93% 0.50% 4.63% 20.43% 21.28% 45.59%

7 -3.44% 0.33% 4.93% 22.72% 23.31% 50.00%

8 -3.78% 0.28% 5.09% 24.78% 25.00% 52.47%

9 -4.27% 0.02% 4.91% 26.22% 25.76% 53.98%

10 -4.58% -0.10% 4.58% 27.41% 26.17% 54.11%

Risk Grade

1 -0.36% 0.38% 1.08% 4.30% 3.87% 11.11%

2 -0.75% 0.73% 2.55% 8.21% 8.76% 20.91%

3 -1.36% 0.95% 3.91% 13.07% 14.25% 30.54%

4 -1.80% 0.85% 4.49% 15.69% 16.98% 36.80%

5 -2.38% 0.70% 4.80% 17.78% 19.13% 42.65%

6 -3.00% 0.40% 4.78% 20.31% 21.02% 47.24%

7 -3.48% 0.27% 5.01% 22.65% 23.17% 52.50%

8 -3.79% 0.26% 5.11% 24.76% 24.95% 56.40%

9 -4.27% 0.01% 4.90% 26.21% 25.75% 58.89%

10 -4.59% -0.11% 4.57% 27.40% 26.16% 59.95%

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PIM Strategic Ethical Active - Profile DPIM Strategic Ethical Active - Profile C

Risk Grade

1 -0.40% 0.31% 0.94% 4.16% 3.72% 11.06%

2 -1.10% 0.28% 1.84% 8.40% 8.10% 19.11%

3 -1.88% 0.27% 2.85% 13.34% 13.17% 28.82%

4 -2.32% 0.17% 3.42% 15.94% 15.85% 34.73%

5 -2.89% 0.05% 3.78% 18.09% 18.02% 40.35%

6 -3.34% -0.04% 4.08% 20.49% 20.24% 45.39%

7 -3.79% -0.13% 4.38% 22.92% 22.46% 50.56%

8 -4.09% -0.12% 4.53% 25.09% 24.28% 53.38%

9 -4.41% -0.16% 4.62% 26.39% 25.42% 56.90%

10 -4.59% -0.11% 4.57% 27.40% 26.16% 59.10%

Risk Grade

1 -0.45% 0.25% 0.89% 4.13% 3.59% 11.13%

2 -1.20% 0.20% 1.81% 8.37% 7.84% 19.44%

3 -2.03% 0.16% 2.83% 13.30% 12.74% 29.62%

4 -2.50% 0.07% 3.44% 15.91% 15.36% 35.78%

5 -3.10% -0.03% 3.87% 18.07% 17.59% 41.41%

6 -3.56% -0.09% 4.24% 20.49% 19.81% 46.67%

7 -4.01% -0.15% 4.59% 22.95% 22.04% 52.07%

8 -4.29% -0.12% 4.77% 25.14% 23.85% 54.97%

9 -4.63% -0.15% 4.91% 26.46% 25.04% 58.47%

10 -4.80% -0.08% 4.87% 27.47% 25.81% 60.67%

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5 YE

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Asset ClassAsset Class



UK Ethical Corporate Bonds -1.41% 0.88% 2.94% 12.87% 12.60% 27.38%

UK Property 1.41% 4.30% 8.00% 8.11% 16.57% 44.91%

UK Ethical Equity Growth -4.38% -0.93% 6.61% 20.35% 21.80% 53.80%

UK Ethical Equity Income -5.13% -2.15% 3.27% 14.09% 16.53% 49.65%

International Ethical Equity -4.06% -0.27% 6.51% 35.76% 33.89% 59.79%

Ethical Emerging Markets Equity -5.07% 1.77% 1.52% 31.66% 26.19% 67.27%







Asset Class







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UK Government Bonds -0.36% 2.41% 0.30% 13.94% 15.61% 27.88%

UK Property 1.41% 4.30% 8.00% 8.11% 16.57% 43.68%





PIM Strategic Ethical Active (Profile A-D): Asset Class Returns to period end 31 March 2018

Defensive assets have relatively outperformed over 3 and 6 months owing to the recent reversal of sentiment towards risk assets. Over 1 year, relative performance is dominated by UK Property, UK and International Equity. Over 2 and 3 years, International and Emerging Markets have performed very strongly, whilst UK, International and Emerging Markets have all performed well over 5 years

Asset Class

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3 YE

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N

3 YE

AR R

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N

3 YE

AR R

ETUR

N

3 YE

AR R

ETUR

N


5 YE

AR R

ETUR

N

5 YE

AR R

ETUR

N

5 YE

AR R

ETUR

N

5 YE

AR R

ETUR

N



PIM Tactical Ethical Active Portfolios

The Tactical Ethical Active offering is built around five asset classes; Managed Liquidity, Cautious, Balanced, Active and Global Alpha. The Managed Liquidity portfolio is the same as PIM Strategic Active portfolios given the difficulties in sourcing an appropriate ethical fund in this area. The asset allocation between bonds, equities and other asset classes may vary within the Cautious, Balanced and Active portfolios, at the discretion of the investment manager (PIM). The aim is to minimise volatility whilst maximising risk adjusted returns. Funds are selected from the Ethical Investment Research Services (EIRiS) fund universe, after applying PIM’s due diligence process. Passive investments are not available within this solution.

GL

OBAL

AL

PHA

ACTI

VE

TE

1 50% 50% 0% 0% 0% 100%

2 25% 75% 0% 0% 0% 100%

3 0% 100% 0% 0% 0% 100%

4 0% 75% 25% 0% 0% 100%

5 0% 25% 75% 0% 0% 100%

6 0% 0% 100% 0% 0% 100%

7 0% 0% 75% 25% 0% 100%

8 0% 0% 25% 75% 0% 100%

9 0% 0% 0% 100% 0% 100%

10 0% 0% 0% 75% 25% 100%

PIM Tactical Ethical Active Portfolios - Asset Allocation Table


The current portfolio holdings for the PIM Tactical Ethical Active portfolios are shown in the table below, as at 31 March 2018. Please refer to page 57 for details on fund changes over the period. If you have any further queries, please refer to your relationship manager.

Risk Grade

Portfolios are rebalanced to their asset allocation on a periodic basis.


Fund OCF 0.10% 0.48% 0.68% 0.80% 0.84% 0.69%

Historic Yield 0.22% 2.20% 2.17% 1.41% 0.50% 3.70%


BALA

NCE

D

MAN

AGED

LI

QUID

ITY

CAUT

IOUS

TOTA

L

CAUT

IOUS

BALA

NCE

D

ACTI

VE

HOL

DIN

GS

Managed Liquidity Federated Short-Term Sterling Prime 7.50% 0.00% 0.00%

BlackRock ICS Institutional Sterling Liquidity 7.50% 0.00% 0.00%

Fixed Interest Allianz Gilt Yield 16.87% 6.63% 0.00%

M&G Index Linked Bond 5.50% 2.50% 0.00%

Liontrust Sustainable Future Corporate Bond 9.63% 4.37% 0.00%

Rathbone Ethical Bond 11.00% 5.00% 0.00%

Royal London Ethical Bond 11.00% 5.00% 0.00%

Property L&G UK Property Feeder 3.34% 3.34% 3.34%

Threadneedle UK Property Authorised Trust Feeder 3.33% 3.33% 3.33%

Standard Life Investments UK Real Estate Income Feeder 3.33% 3.33% 3.33%

UK Equity Premier Ethical 2.40% 7.00% 5.00%

EdenTree Amity UK 2.40% 7.00% 5.00%

Royal London Sustainable Leaders 2.40% 7.00% 5.00%

F&C Responsible UK Income 2.40% 7.00% 5.00%

Janus Henderson UK Responsible Income 2.40% 7.00% 5.00%

International Equity Liontrust Sustainable Future European Growth 2.25% 7.75% 8.75%

Stewart Investors Asia Pacific Sustainability 1.50% 2.50% 15.00%

Vontobel mtx Sustainable Emergin Markets Leaders 1.50% 2.50% 15.00%

Liontrust Sustainable Future Global Growth 1.25% 6.25% 8.75%

Janus Henderson Global Sustainable Equity 1.25% 6.25% 8.75%

F&C Responsible Global Equity 1.25% 6.25% 8.75%

Total 100% 100% 100%


PIM Tactical Ethical Active - Asset Class Returns to period end 31 March 2018

The PIM Tactical Ethical Risk Graded portfolios are built through a weighted exposure to the five underlying asset classes. For transparency purposes the returns of each asset class are given below. These returns should not be considered in isolation as the asset class risk and return characteristics are taken into account within the construction of each Risk Graded portfolio.

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Portfolio

PIM Tactical Ethical Active: Cautious

-1.26% 1.09% 3.35% 12.08% 13.25% 31.23%


-3.15% -0.95% 0.83% 13.84% 11.05% 24.96%

PIM Tactical Ethical Active Balanced

-3.05% 0.23% 5.01% 19.05% 20.18% 47.19%


-4.18% -0.96% 1.54% 18.92% 15.43% 34.89%

PIM Tactical Ethical Active: Active -3.98% 0.49% 4.93% 26.45% 24.94% 52.79%


PIM Tactical Ethical Active Global Alpha

-2.82% 3.10% 8.45% 38.64% 34.16% 72.64%

FTSE World -4.43% 0.32% 2.55% 36.30% 36.30% 74.27%

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1 -0.58% 0.63% 1.81% 6.30% 6.82% 16.38%

2 -0.92% 0.86% 2.58% 9.18% 10.02% 23.63%

3 -1.26% 1.09% 3.35% 12.08% 13.25% 31.23%

4 -1.71% 0.88% 3.77% 13.80% 14.98% 35.10%

5 -2.60% 0.45% 4.60% 17.28% 18.45% 43.08%

6 -3.05% 0.23% 5.01% 19.05% 20.18% 47.19%

7 -3.28% 0.30% 5.00% 20.87% 21.38% 48.61%

8 -3.75% 0.43% 4.95% 24.57% 25.09% 53.09%

9 -3.98% 0.49% 4.93% 26.45% 24.94% 52.79%

10 -3.69% 1.15% 5.81% 29.43% 27.24% 57.66%

Risk Grade

PIM Tactical Ethical Active - Portfolio Returns to period end 31 March 2018

All portfolios continue to perform in line with their relative risk over 3 months, 2, 3 and 5 years, (with the exception of Risk Grade 10 over 3 months and Risk Grade 9 over 5 years), owing to the outperformance of Tactical Cautious over shorter periods and Global Alpha over the latter. Performance is distorted by the strong relative performance of Tactical Cautious and Global Alpha over 6 months and Tactical Balanced and Global Alpha over 1 year, which typically sit at opposite ends of the risk spectrum.




PIM Tactical Ethical Active Income

The Tactical Ethical Active Income portfolio invests in a combination of Bonds, Property and Equity collectives with the aim of providing a yield between 10% and 20% greater than that of the broad UK stock market, which is currently 3.85%. The mix of asset classes will be varied by the investment manager (PIM) depending upon their risk and return characteristics. Funds will be selected from the Ethical Investment Research Services (EIRiS) fund universe within Fixed Interest and Equity Income in line with the Ethical mandate.


The current portfolio holdings for PIM Tactical Ethical Active Income are shown in the table below, as at 31 March 2017. Please refer to page 57 for details on fund changes over the period. If you have any further queries, please refer to your relationship manager.

PIM Tactical Ethical Active Income - Portfolio Returns to period end 31 March 2018

Given the unique character of the portfolio, Tactical Ethical Active Income does not easily fit within any of the IA sector definitions and there is no natural benchmark for performance comparisons. However, in the table below are some of the common benchmarks for reference purposes.

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PIM Tactical Ethical Active Income -2.86% -0.21% 3.88% 12.25% 15.00% 38.70%

Citi UK Government Bond Index -1.86% 0.29% -1.55% 5.43% 8.94% 22.01%

IA Sterling Corporate Bond Sector -1.33% 0.48% 1.70% 10.73% 9.59% 22.81%

IA UK Equity Income Sector -6.11% -3.25% 0.29% 15.47% 14.07% 40.95%

Portfolio / Benchmark


INCO

ME

HOL

DIN

GS

Fixed Interest Liontrust Sustainable Future Corporate Bond 10.00%

Rathbone Ethical Bond 11.00%

Royal London Ethical Bond 11.00%

Property L&G UK Property Feeder 6.00%

Threadneedle UK Property Authorised Trust Feeder 6.00%

Standard Life Investments UK Real Estate Income Feeder 6.00%

Equity Income Janus Henderson UK Responsible Income 25.00%

F&C Responsible UK Income 25.00%

Total 100%


PIM Tactical Ethical Active Income % Asset Allocation as of 31 March 2018

The PIM Tactical Ethical Active (Income) Portfolios have a target yield greater than 10% than that of the UK Equity Market.

18.0%

FIXED INTEREST

EQUITY INCOME

PROPERTY


50.0%

32.0%

PIM Tactical Ethical Active Portfolios TE


DFA Multi-Option: UK Perspective

The Dimensional Fund Advisers (DFA) Multi-Option: UK Perspective Solution enables clients to allocate monies across multiple asset classes within a Risk Graded framework. The Multi-Option profile provides the client with additional flexibility to accommodate both pure, passive and (where appropriate) active exposure within each asset class, and to vary the value and small cap tilt as appropriate. The amount to invest into each asset group is dependent upon the clients’ risk profile and, once agreed, is kept constant by the investment manager (PIM) by periodic rebalancing. PIM only have the authority to make infrequent changes to asset weightings, as identified by a structural change.

DFA Multi-Option: UK Perspective - Asset Allocation Table

Ongoing Charge Figure (OCF) Net of Rebates and Historic Yield


DFA Multi-Option: UK Perspective Pure

DFA Multi-Option: UK Perspective Passive

PROP

ERTY

UK E

QUIT

Y GR

OWTH

UK E

QUIT

Y IN

COM

EUK

VALU

E &

SMAL

L CA

PW

ORLD

EX-

UK E

QUIT

Y

FIXE

D IN

TERE

ST

MAN

AGED

LIQ

UIDI

TY

DU

Fund OCF 0.20% 0.28% 0.22% 0.24% 0.12% 0.51% 0.35% 0.56% 0.67% 1.01%

Historic Yield 1.01% 1.03% 2.46% 2.62% 4.74% 2.34% 1.49% 0.98% 1.71% 1.13%

Fund OCF 0.20% 0.08% 0.22% 0.05% 0.12% 0.51% 0.08% 0.56% 0.22% 1.01%

Historic Yield 1.01% 1.80% 2.46% 3.55% 4.74% 2.34% 1.89% 0.98% 1.85% 1.13%

WOR

LD E

X-UK

VAL

UE

& S

MAL

L CA

PEM

ERGI

NG

MAR

KETS

EQUI

TY

EMER

GIN

G M

ARKE

TS V

ALUE

& S

MAL

L CA

P EQ

UITY

PROP

ERTY

UK E

QUIT

Y GR

OWTH

UK E

QUIT

Y IN

COM

EUK

VALU

E &

SMAL

L CA

PW

ORLD

EX-

UK E

QUIT

Y

FIXE

D IN

TERE

ST

MAN

AGED

LIQ

UIDI

TY

WOR

LD E

X-UK

VAL

UE

& S

MAL

L CA

PEM

ERGI

NG

MAR

KETS

EQUI

TY

EMER

GIN

G M

ARKE

TS V

ALUE

& S

MAL

L CA

P EQ

UITY

1 100% 0% 0% 0% 0% 0% 0% 0% 0% 0% 100%

2 45% 40% 5% 1% 1% 3% 2% 3% 0% 0% 100%

3 25% 45% 10% 2% 1% 7% 2% 3% 3% 2% 100%

4 10% 50% 10% 3% 2% 10% 4% 6% 3% 2% 100%

5 0% 50% 10% 3% 3% 14% 4% 6% 5% 5% 100%

6 0% 45% 5% 4% 4% 17% 6% 9% 5% 5% 100%

7 0% 35% 5% 5% 4% 21% 6% 9% 8% 7% 100%

8 0% 25% 5% 6% 5% 24% 6% 9% 10% 10% 100%

9 0% 20% 0% 6% 6% 28% 8% 12% 10% 10% 100%

10 0% 10% 0% 7% 7% 31% 8% 12% 13% 12% 100%

PROP

ERTY

UK E

QUIT

Y GR

OWTH

UK E

QUIT

Y IN

COM

EUK

VAL

UE &

SM

ALL

CAP

EQUI

TY

WOR

LD E

X-UK

EQU

ITY

FIXE

D IN

TERE

ST

MAN

AGED

LIQ

UIDI

TY

WOR

LD E

X-UK

VAL

UE &

SMAL

L CA

P EQ

UITY

Portfolios are rebalanced to their asset allocation on a semi annual basis.

EMER

GIN

G M

ARKE

TS

EQUI

TY

EMER

GIN

G M

ARKE

T

VALU

E &

SM

ALL

CAP

EQUI

TYTO

TAL

Risk Grade





The current portfolio holdings for DFA Multi-Option: UK Perspective (Pure and Passive) are shown in the tables below, as at 31 March 2018. For the purposes of on-going suitability due diligence is conducted on DFA and underlying passive fund providers on a 6 monthly basis.


GLOB

AL P

ROPE

RTY

UK E

QUIT

Y GR

OWTH

UK E

QUIT

Y IN

COM

E

FIXE

D IN

TERE

ST

MAN

AGED

LIQ

UIDI

TY

WOR

LD E

X-UK

EQU

ITY

Dimensional Global Ultra Short Fixed Income

Dimensional Global Short Dated Bond

iShares Global Property Securities Equity Index

Dimensional UK Core Equity


Dimensional UK Value

Dimensional International Core Equity

Dimensional Global Targeted Value

Dimensional Emerging Markets Core Equity

Dimensional Emerging Markets Targeted Value

Dimensional Sterling Inflation Linked Intermediate Duration Fixed Income

Dimensional UK Small Companies







Dimensional UK Value






Dimensional UK Small Companies



L&G Japan Index

Vanguard Global Bond Index Hedge

L&G Pacific Index

UK V

ALUE

& S

MAL

L CA

P

WOR

LD E

X-UK

VAL

UE &

SMAL

L CA

P EQ

UITY

EMER

GIN

G M

ARKE

TS

EQUI

TY

EMER

GIN

G M

ARKE

TS

VALU

E &

SM

ALL

CAP

EQUI

TY


DFA Multi-Option UK Perspective - Portfolio Returns to period end 31 March 2018

All DFA UK (Pure and Passive) portfolios continue to perform in line with their relative risk over 3 months, 6 months (for Passive), 2, 3 and 5 years owing to the outperformance of defensive assets over shorter periods (and World-Ex UK over 6 months for Passive), World Ex-UK Equity and Emerging Markets over 2 to 3 years and World-Ex UK Equity over 5 years. Performance is distorted over 6 months (and 1 year for Pure) by the strong relative returns in defensive and Emerging Markets assets, which typically sit at opposite ends of the risk spectrum.

6 M

ONTH

RET

URN

1 YE

AR R

ETUR

N

2 YE

AR R

ETUR

N

3 M

ONTH

RET

URN

Risk Grade Risk Grade

1 -0.20% -0.33% -0.30% -0.18% 0.42% 1.54%

2 -1.44% -0.88% -0.52% 4.14% 4.96% 10.07%

3 -2.33% -1.02% -0.35% 8.05% 8.50% 15.98%

4 -2.94% -1.16% -0.14% 11.12% 11.22% 21.48%

5 -3.42% -1.05% 0.35% 14.50% 13.95% 25.58%

6 -3.57% -0.87% 0.96% 16.97% 15.77% 28.97%

7 -3.96% -0.69% 1.53% 20.26% 18.19% 32.65%

8 -4.37% -0.54% 2.01% 23.49% 20.49% 36.16%

9 -4.52% -0.36% 2.65% 26.11% 22.31% 39.72%

10 -4.91% -0.20% 3.15% 29.45% 24.58% 43.28%

DFA Multi-Option: UK Perspective Pure DFA Multi-Option: UK Perspective Passive

6 M

ONTH

RET

URN

1 YE

AR R

ETUR

N

2 YE

AR R

ETUR

N

3 M

ONTH

RET

URN

5 YE

AR R

ETUR

N

Please refer to Important Notes on page 4 for how performance figures are calculated. Performance data is correct as of 03 April 2018. Past performance is not an indication of future returns. The value of investments and any income from them is not guaranteed and can go down as well as up. Please refer to Important Notes on page 4 for how performance figures are calculated. Performance data is correct as of

03 April 2018. Past performance is not an indication of future returns. The value of investments and any income from them is not guaranteed and can go down as well as up.

1 -0.20% -0.33% -0.30% -0.18% 0.42% 1.54%

2 -1.27% -0.12% 0.19% 6.30% 7.15% 16.34%

3 -2.12% -0.15% 0.56% 10.60% 11.02% 23.34%

4 -2.69% -0.17% 0.88% 14.05% 14.11% 30.09%

5 -3.14% -0.05% 1.45% 17.54% 16.90% 34.45%

6 -3.28% 0.06% 2.00% 19.82% 18.50% 37.24%

7 -3.69% 0.07% 2.52% 22.65% 20.38% 39.26%

8 -4.12% 0.03% 2.91% 25.38% 22.12% 41.02%

9 -4.25% 0.15% 3.50% 27.77% 23.72% 43.88%

10 -4.66% 0.14% 3.95% 30.61% 25.42% 45.59%

5 YE

AR R

ETUR

N

3 YE

AR R

ETUR

N

3 YE

AR R

ETUR

N


DU


1 YE

AR R

ETUR

N

5 YE

AR R

ETUR

N

6 M

ONTH

RET

URN

3 M

ONTH

RET

URN



Managed Liquidity -0.20% -0.33% -0.30% -0.18% 0.42% 1.54%

Fixed Interest -0.82% -0.80% -0.48% 2.40% 4.17% 6.94%

Global Property -8.15% -5.60% -7.83% 7.79% 10.65% 32.75%

UK Equity Growth -5.51% -1.46% 2.54% 23.78% 19.40% 40.05%

UK Equity Income -6.68% -2.58% -1.07% 16.23% 9.28% 27.49%

UK Value and Small Cap -6.05% -0.75% 5.33% 25.24% 20.08% 46.06%

World Ex-UK Equity -6.23% -1.21% 0.57% 34.62% 33.64% 71.73%

World Ex-UK Value & Small Cap Equity

-5.55% -1.98% -0.26% 37.97% 32.76% 68.81%

Emerging Markets Equity -3.41% 3.61% 6.89% 46.37% 35.31% 36.62%

Emerging Markets Value & Small Cap Equity

-4.00% 2.07% 4.22% 45.09% 35.63% 35.82%


Fixed Interest -0.47% 1.07% 1.22% 7.68% 9.58% 22.54%

Global Property -8.15% -5.60% -7.83% 7.79% 10.65% 32.75%

UK Equity Growth -6.51% -1.89% 1.59% 23.77% 18.82% 37.58%

UK Equity Income -6.68% -2.58% -1.07% 16.23% 9.28% 27.49%

UK Value and Small Cap -6.05% -0.75% 5.33% 25.24% 20.08% 46.06%

World Ex-UK Equity -4.30% 0.17% 2.40% 37.08% 36.60% 79.26%

World Ex-UK Value & Small Cap Equity

-5.55% -1.98% -0.26% 37.97% 32.76% 68.81%



-4.00% 2.07% 4.22% 45.09% 35.63% 35.82%

DFA Multi-Option UK Perspective - Asset Class Returns to period end 31 March 2018

Whilst over 3 and 5 years, World Ex-UK Equity (and Value and Small Cap) have relatively outperformed, Emerging Markets Equity (and Value and Small Cap) has equally delivered attractive returns over 6 months to 3 years. Over 3 months, Managed Liquidity and Fixed Interest were the best performing assets given the reversion in sentiment towards risk assets over the period.


Asset Class Asset Class2

YEAR

RET

URN

1 YE

AR R

ETUR

N

5 YE

AR R

ETUR

N

6 M

ONTH

RET

URN

3 M

ONTH

RET

URN

2 YE

AR R

ETUR

N


3 YE

AR R

ETUR

N

3 YE

AR R

ETUR

N


DFA Multi-Option: Global Perspective

The DFA Multi-Option: Global Perspective Solution enables clients to allocate monies across multiple asset classes within a Risk Graded framework that uses a global approach to asset weightings. The Multi-Option profile provides the client with additional flexibility to accommodate both pure, passive and (where appropriate) active exposure within each asset class, and to vary the value and small cap tilt as appropriate. The amount to invest into each asset group is dependent upon the client’s risk profile and, once agreed, is kept constant by the investment manager (PIM) by periodic rebalancing. PIM only has the authority to make infrequent changes to asset weightings, as identified by a structural change.

DFA Multi-Option: Global Perspective - Asset Allocation Table



DFA Multi-Option: Global Perspective Pure

DFA Multi-Option: Global Perspective Passive

Risk Grade

1 100% 0% 0% 0% 0% 0% 0% 100%

2 45% 40% 5% 4% 6% 0% 0% 100%

3 25% 45% 10% 6% 9% 3% 2% 100%

4 10% 50% 10% 10% 15% 3% 2% 100%

5 0% 50% 10% 12% 18% 5% 5% 100%

6 0% 45% 5% 14% 21% 8% 7% 100%

7 0% 35% 5% 16% 24% 10% 10% 100%

8 0% 25% 5% 18% 27% 13% 12% 100%

9 0% 20% 0% 20% 30% 15% 15% 100%

10 0% 10% 0% 22% 33% 18% 17% 100%

GLOB

AL P

ROPE

RTY

GLOB

AL E

QUIT

YGL

OBAL

VAL

UE &

SMAL

L CA

P EQ

UITY

EMER

GIN

G M

ARKE

TS

EQUI

TY

EMER

GIN

G M

ARKE

T VA

LUE

& S

MAL

L CA

P EQ

UITY

FIXE

D IN

TERE

ST

MAN

AGED

LIQ

UIDI

TY

TOTA

L

Portfolios are rebalanced to their asset allocation on a semi annual basis.

GLOB

AL P

ROPE

RTY

GLOB

AL E

QUIT

Y

GLOB

AL V

ALUE

&

SMAL

L CA

P

EMER

GIN

G M

ARKE

TS

EQUI

TY

EMER

GIN

G M

ARKE

TS

VALU

E &

SM

ALL

CAP

EQUI

TY

FIXE

D IN

TERE

ST

MAN

AGED

LIQ

UIDI

TY

DG

Fund OCF 0.20% 0.29% 0.22% 0.36% 0.56% 0.67% 1.01%

Historic Yield 1.01% 1.23% 2.46% 1.51% 0.98% 1.71% 1.13%

Fund OCF 0.20% 0.10% 0.22% 0.08% 0.56% 0.22% 1.01%

Historic Yield 1.01% 1.49% 2.46% 2.22% 0.98% 1.85% 1.13%

GLOB

AL P

ROPE

RTY

GLOB

AL E

QUIT

Y

GLOB

AL V

ALUE

&

SMAL

L CA

P

EMER

GIN

G M

ARKE

TS

EQUI

TY

EMER

GIN

G M

ARKE

TS

VALU

E &

SM

ALL

CAP

EQUI

TY

FIXE

D IN

TERE

ST

MAN

AGED

LIQ

UIDI

TY





The current portfolio holdings for DFA Multi-Option: Global Perspective Pure and Passive are shown in the tables below, as at 31 March 2018. For the purposes of on-going suitability, due diligence is conducted on Dimensional Fund Advisers (DFA) and underlying passive fund providers on a 6 monthly basis.




Dimensional Global Short Dated Bond


Dimensional Global Core Equity


Dimensional Emerging Markets Core Equity


Dimensional Sterling Inflation Linked Intermediate Duration Fixed Income








Vanguard Global Bond Index Hedged




L&G Japan Index

L&G Pacific Index

GLOB

AL P

ROPE

RTY

GLOB

AL E

QUIT

Y

GLOB

AL V

ALUE

AN

D

SMAL

L CA

P

FIXE

D IN

TERE

ST

MAN

AGED

LIQ

UIDI

TY

EMER

GIN

G M

ARKE

TS

VALU

E &

SM

ALL

CAP

EQUI

TY

EMER

GIN

G M

ARKE

TS

EQUI

TY


DFA Multi-Option Global Perspective - Portfolio Returns to period end 31 March 2018

All DFA Global (Pure and Passive) portfolios have performed in line with their relative risk over 1 year (for Pure), 2, 3 and 5 years owing to the strong relative performance of Emerging Markets Equity (over 1 to 3 years) and Global Equity (over 3 to 5 years). Over shorter periods performance is distorted by the outperformance of defensive assets, with Emerging Markets Equity also performing well over 6 months and 1 year.

6 M

ONTH

RET

URN

1 YE

AR R

ETUR

N

5 YE

AR R

ETUR

N

3 M

ONTH

RET

URN

Risk Grade Risk Grade

1 -0.20% -0.33% -0.30% -0.18% 0.42% 1.54%

2 -1.25% -0.44% -0.02% 5.23% 6.35% 15.04%

3 -2.06% -0.53% 0.15% 9.84% 10.63% 22.69%

4 -2.58% -0.60% 0.32% 13.64% 14.18% 30.22%

5 -2.99% -0.48% 0.72% 17.74% 17.68% 35.78%

6 -2.96% -0.11% 1.52% 21.32% 20.36% 38.69%

7 -3.33% -0.06% 1.79% 25.14% 23.25% 42.49%

8 -3.68% 0.02% 2.13% 29.05% 26.12% 46.31%

9 -3.67% 0.36% 2.87% 32.78% 28.80% 49.20%

10 -4.02% 0.43% 3.21% 36.81% 31.65% 53.02%

1 -0.20% -0.33% -0.30% -0.18% 0.42% 1.54%

2 -1.35% -0.95% -0.66% 4.13% 5.12% 10.80%

3 -2.21% -1.13% -0.70% 8.49% 9.18% 17.63%

4 -2.74% -1.26% -0.63% 12.09% 12.51% 24.28%

5 -3.18% -1.16% -0.32% 16.08% 15.96% 29.58%

6 -3.17% -0.75% 0.42% 19.69% 18.75% 32.94%

7 -3.54% -0.58% 0.75% 23.71% 21.94% 37.83%

8 -3.91% -0.40% 1.11% 27.80% 25.12% 42.80%

9 -3.91% -0.01% 1.83% 31.61% 27.95% 46.27%

10 -4.27% 0.17% 2.19% 35.84% 31.13% 51.35%

DFA Multi-Option: Global Perspective Pure DFA Multi-Option: Global Perspective Passive

2 YE

AR R

ETUR

N

6 M

ONTH

RET

URN

1 YE

AR R

ETUR

N

5 YE

AR R

ETUR

N

3 M

ONTH

RET

URN

2 YE

AR R

ETUR

N



3 YE

AR R

ETUR

N

3 YE

AR R

ETUR

N


DFA Multi-Option: Global Perspective DG


DFA Multi-Option Global Perspective - Asset Class Returns to period end 31 March 2018

Managed Liquidity and Fixed Interest have performed well over 3 months, owing to the recent reversion in sentiment towards risk assets. Emerging Markets Equity has outperformed over 6 months to 3 years, whilst Global Equity has delivered attractive returns over 3 and 5 years.


1 YE

AR R

ETUR

N

5 YE

AR R

ETUR

N

6 M

ONTH

RET

URN

3 M

ONTH

RET

URN



Fixed Interest -0.78% -1.02% -0.46% 0.91% 2.94% 6.20%

Global Property -8.15% -5.60% -7.83% 7.79% 10.65% 32.75%

Global Equity -4.84% -0.35% 1.55% 34.03% 32.92% 70.70%

Global Value & Small Cap -5.55% -1.98% -0.26% 37.97% 32.76% 68.81%



-4.00% 2.07% 4.22% 45.09% 35.63% 35.82%


Fixed Interest -0.56% 0.25% 1.09% 3.56% 5.98% 16.57%

Global Property -8.15% -5.60% -7.83% 7.79% 10.65% 32.75%

Global Equity -4.66% -0.18% 2.11% 34.54% 33.14% 71.60%

Global Value & Small Cap -5.55% -1.98% -0.26% 37.97% 32.76% 68.81%



-4.00% 2.07% 4.22% 45.09% 35.63% 35.82%

Asset Class Asset Class

2 YE

AR R

ETUR

N

1 YE

AR R

ETUR

N

5 YE

AR R

ETUR

N

6 M

ONTH

RET

URN

3 M

ONTH

RET

URN

2 YE

AR R

ETUR

N


3 YE

AR R

ETUR

N

3 YE

AR R

ETUR

N


Distribution Technology Multi-Option

The Distribution Technology (DT) Multi-Option Solution incorporates ten risk graded model portfolios constructed by Parmenion Investment Management (PIM). The asset weightings of these portfolios exactly match those specified by Distribution Technology in their quarterly investment report. This solution allows the Adviser to choose between active and/or passive fund exposure, within each asset class, as appropriate for the underlying client. Please note, on 05 October 2017 DT solution asset allocations were revised in line with the latest Q3 DT SAA.

Distribution Technology Multi-Option: Asset Allocation Table

Risk Grade

1 100.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 100%

2 46.00% 13.00% 5.00% 8.00% 11.00% 0.00% 12.00% 0.00% 0.00% 0.00% 0.00% 0.00% 5.00% 100%

3 15.00% 21.00% 9.00% 9.00% 14.00% 0.00% 14.00% 2.00% 6.00% 2.00% 0.00% 0.00% 8.00% 100%

4 10.00% 22.00% 5.00% 3.00% 8.00% 3.00% 19.00% 4.00% 10.00% 4.00% 4.00% 0.00% 8.00% 100%

5 5.00% 21.00% 0.00% 0.00% 5.00% 4.00% 26.00% 4.00% 12.00% 6.00% 5.00% 5.00% 7.00% 100%

6 4.00% 16.00% 0.00% 0.00% 0.00% 4.00% 31.00% 5.00% 12.00% 7.00% 8.00% 8.00% 5.00% 100%

7 0.00% 5.00% 0.00% 0.00% 0.00% 5.00% 35.00% 5.00% 10.00% 8.00% 13.00% 14.00% 5.00% 100%

8 0.00% 0.00% 0.00% 0.00% 0.00% 5.00% 20.00% 5.00% 8.00% 7.00% 23.00% 27.00% 5.00% 100%

9 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 16.00% 5.00% 7.00% 6.00% 25.00% 41.00% 0.00% 100%

10 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 5.00% 0.00% 5.00% 0.00% 27.00% 63.00% 0.00% 100%

UK I/

L BO

NDS

INTE

RNAT

ION

AL B

ONDS

GLOB

AL H

IGH

YIE

LD

UK E

QUIT

Y

EURO

PEAN

EQU

ITY

UK C

ORP

BON

DS

UK C

ASH

US E

QUIT

Y

These are the asset weightings that were in effect as at 03 April 2018. Please refer to solution factsheet for details of current asset weightings.

Portfolios are rebalanced to their asset allocation on a quarterly basis.

DT

JAPA

N E

QUIT

Y

PACI

FIC

EX-J

APAN

EQUI

TY

EMER

GIN

G M

ARKE

TS

EQUI

TY

UK P

ROPE

RTY

TOTA

L

UK G

ILTS




Distribution Technology Multi-Option Passive

UK I/

L GI

LTS

INTE

RNAT

ION

AL B

ONDS

UK G

ILTS

UK E

QUIT

Y

EURO

PEAN

EQU

ITY

UK C

ORP

BON

DS

UK C

ASH

Fund OCF 0.10% 0.55% 0.56% 0.78% 0.32% 0.73% 0.83% 0.87% 0.77% 1.02% 0.87% 1.02% 0.72%

Historic Yield 0.22% 3.20% 0.00% 3.10% 1.23% 4.62% 2.82% 1.22% 0.36% 1.57% 2.41% 1.15% 3.23%

Fund OCF 0.10% 0.06% 0.10% 0.10% 0.06% 0.73% 0.09% 0.09% 0.06% 0.10% 0.14% 0.22% 0.72%

Historic Yield 0.22% 2.63% 0.00% 1.65% 1.44% 4.62% 4.15% 2.46% 1.54% 1.56% 3.14% 1.85% 3.23%

Distribution Technology Multi-Option Active

US E

QUIT

Y

JAPA

N E

QUIT

Y

PACI

FIC

EX-J

APAN

EQUI

TY

EMER

GIN

G M

ARKE

TS

EQUI

TY

UK P

ROPE

RTY



GLOB

AL H

IGH

YIE

LD

UK I/

L GI

LTS

INTE

RNAT

ION

AL B

ONDS

UK G

ILTS

UK E

QUIT

Y

EURO

PEAN

EQU

ITY

UK C

ORP

BON

DS

UK C

ASH

US E

QUIT

Y

JAPA

N E

QUIT

Y

PACI

FIC

EX-J

APAN

EQUI

TY

EMER

GIN

G M

ARKE

TS

EQUI

TY

UK P

ROPE

RTY

GLOB

AL H

IGH

YIE

LD



UK I/

L GI

LTS

INTE

RNAT

ION

AL

BON

DS

UK G

ILTS

UK C

ORP

BO

NDS

UK C

ASH

EURO

PEAN

EQ

UITY




M&G Optimal Income

Allianz Gilt Yield Threadneedle High Yield Bond

Trojan Income Jupiter European Vontobel US Equity











Schroder Tokyo Schroder Asian Income




Unicorn UK Income





LF Miton UK Multi Cap Income





Investec UK Alpha

UK E

QUIT

Y

The current portfolio holdings for DT Multi Option are shown in the tables below, as at 31 March 2018. Please refer to page 57 for details on fund changes over the period. If you have any further queries, please refer to your relationship manager.

Distribution Technology Multi-Option Active and Passive

US E

QUIT

Y

JAPA

N E

QUIT

Y

PACI

FIC

EX

-JAP

AN

EQUI

TY

UK P

ROPE

RTY

EMER

GIN

G

MAR

KETS

EQ

UITY






Threadneedle High Yield Bond




L&G Japan Index L&G Pacific Index Vanguard Emerging Markets Stock Index






Active

Passive

GLOB

AL H

IGH

YI

ELD


Distribution Technology Multi-Option DGDT

Distribution Technology Multi-Option - Portfolio Returns to period end 31 March 2018

All portfolios (Active and Passive) have performed in line with their relative risk over 1, 2 and 3 years, owing to the relative outperformance of European Equity over 1 year, Emerging Markets over 1 and 2 years and Japan Equity over 2 and 3 years. Performance over shorter periods is distorted by the strong relative returns of defensive assets over 3 months and 6 months, as well as Japan, Pacific and Emerging Markets Equity over the latter period. Since inception performance is distorted by the attractive relative returns from European, US and Japan Equity, which have all outperformed Asia Pacific and Emerging Markets Equity which have an increasing asset allocation as you progress through the higher Risk Grades.


6 M

ONTH

RET

URN

FROM

INCE

PTIO

N

(01.

06.2

013)

3 M

ONTH

RET

URN

Risk Grade

1 0.10% 0.17% 0.28% 0.65% 0.55% 3.02%

2 -0.80% 0.47% 1.56% 7.64% 8.60% 17.61%

3 -1.55% 0.63% 2.23% 12.80% 14.67% 30.18%

4 -2.32% 0.36% 2.51% 15.85% 17.97% 37.93%

5 -3.05% 0.17% 3.29% 19.53% 21.69% 44.44%

6 -3.55% 0.05% 3.83% 23.37% 24.17% 49.29%

7 -3.91% 0.28% 4.59% 27.31% 27.56% 51.22%

8 -3.57% 1.20% 5.94% 32.09% 30.49% 52.35%

9 -3.77% 1.54% 6.83% 37.38% 33.42% 53.24%

10 -3.30% 2.42% 8.01% 41.32% 33.71% 47.53%


1 YE

AR R

ETUR

N


2 YE

AR R

ETUR

N

6 M

ONTH

RET

URN

FROM

INCE

PTIO

N

(01.

06.2

013)

3 M

ONTH

RET

URN

Risk Grade

1 YE

AR R

ETUR

N


2 YE

AR R

ETUR

N

1 0.10% 0.17% 0.28% 0.65% 0.55% 3.02%

2 -0.83% 0.59% 1.15% 7.31% 7.84% 17.34%

3 -1.46% 0.93% 1.81% 13.01% 14.13% 31.12%

4 -2.30% 0.67% 2.08% 17.36% 17.23% 36.33%

5 -3.06% 0.55% 2.76% 21.58% 20.53% 38.95%

6 -3.69% 0.34% 3.07% 25.51% 22.73% 41.15%

7 -4.21% 0.44% 3.64% 29.47% 25.19% 40.81%

8 -3.80% 1.40% 5.14% 34.82% 29.02% 42.25%

9 -3.91% 1.86% 6.02% 40.41% 32.13% 43.55%

10 -3.25% 3.05% 7.75% 44.92% 33.85% 41.86%

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UK Cash 0.10% 0.17% 0.28% 0.65% 0.55% 3.02%

UK Corp Bonds -0.68% 1.16% 1.84% 11.26% 11.76% 25.86%

UK I/L Gilts -0.76% 2.87% -0.34% 19.84% 20.84% 40.54%

International Bonds -0.54% -0.04% 1.23% 1.75% 4.30% 14.60%

UK Gilts 0.39% 2.61% 0.70% 7.83% 11.30% 26.32%

UK Property 1.27% 3.85% 7.41% 6.45% 15.31% 40.40%

Global High Yield* -0.39% 0.33% 4.24% 13.34% 13.52% N/A

UK Equity -6.59% -2.24% 0.26% 19.96% 13.97% 27.84%

European Equity -4.55% -4.31% 3.97% 33.00% 26.97% 51.91%

US Equity -4.23% 0.90% 1.13% 36.83% 40.30% 84.97%

Japan Equity -4.10% 3.20% 5.73% 40.13% 34.51% 61.69%

Pacific Ex-Japan Equity -4.45% 1.84% 2.42% 40.47% 31.74% 42.29%


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UK Cash 0.10% 0.17% 0.28% 0.65% 0.55% 3.02%

UK Corp Bonds -1.28% 0.31% 1.92% 8.86% 8.42% 19.73%

UK I/L Gilts -0.68% 2.71% -0.48% 19.71% 21.26% 40.03%

International Bonds -0.46% 0.37% 2.70% 10.40% 9.01% 12.17%

UK Gilts -0.05% 2.11% 1.09% 8.20% 9.92% 20.22%

UK Property 1.27% 3.85% 7.41% 6.45% 15.31% 40.40%

Global High Yield* -0.39% 0.33% 4.24% 13.34% 13.52% N/A

UK Equity -5.49% -2.04% 2.31% 19.67% 22.71% 48.33%

European Equity -3.56% -1.13% 11.13% 29.66% 33.52% 64.98%

US Equity -5.67% -1.51% -3.19% 27.24% 32.65% 73.67%

Japan Equity -4.95% 2.51% 8.09% 46.85% 43.02% 80.35%

Pacific Ex-Japan Equity -3.25% 2.32% 2.55% 33.36% 28.46% 56.65%


Distribution Technology Multi-Option - Asset Class Returns to period end 31 March 2018

Defensive assets have performed relatively well over 3 months, as sentiment towards risk assets reversed. Over 6 months, UK Gilts, UK I/L Gilts, UK Property, Japan, Asia Pacific and Emerging Markets have all performed well. Over 1 year, returns are dominated by UK Property, European Equity (for Active) and Emerging Markets Equity. Finally, over 2, 3 years and since inception, the best performing asset groups have been Developed and Emerging Markets Equity (except since inception).

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*Distribution Technology introduced the Global High Yield asset class on 15 January 2015. Data is therefore unavailable over longer periods.

*Distribution Technology introduced the Global High Yield asset class on 15 January 2015. Data is therefore unavailable over longer periods.Please refer to Important Notes on page 4 for how performance figures are calculated. Performance data is correct as of

03 April 2018. Past performance is not an indication of future returns. The value of investments and any income from them is not guaranteed and can go down as well as up.

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Portfolio Changes

Portfolios Affected: PIM Strategic Conviction

Asset class: Corporate Bonds

Active/Passive Split: 40/60 to 60/40

We shifted the asset class in favour of our active funds as we felt the protection offered by our active managers was an attractive characteristic in the current environment. If interest rates rise then their shorter duration position versus index will offer some protection.


Asset class: Japan Active/Passive Split: 50/50 to 70/30

We have maintained the path of moving more active, moving from 50/50 to 70/30 in active’s favour. The 3 year quantitative charts we utilise are fairly neutral while 1 year charts suggest an active bias. This is an asset class where we feel we have excellent managers that are able to generate attractive outperformance versus index.


Asset Class: Asia Pacific Active/Passive Split: 80/20 to 60/40

Our strong active position has begun to run its course and our quantitative signals are suggesting a move towards passive exposure. We still wish to maintain an active overweight in the asset class as we feel our active managers will be better placed to protect client capital if we encounter tougher conditions for Asia in the face of potentially quicker than US rate rises that the market is pricing.

CHANGE


Asset class: Emerging Markets Active/Passive Split: 80/20 to 60/40

In similar fashion to Asia Pacific ex Japan, the charts we use suggest such a strong active bias is no longer warranted. As such, we have reduced this to 60:40. Again, we continue with an active bias with volatility picking up. A second reason for reducing, is the cost of active management in Emerging Markets. Costs are significantly higher than passive meaning a strong reason is required to have such a high weight and this is no longer the case.

CHANGE

CHANGE CHANGE

Portfolios Affected: DT Multi Option Active / PIM Strategic Active / PIM Strategic Multi Option Active / PIM Strategic Conviction

Investec UK Alpha

LF Lindsell Train UK Equity / Liontrust Special Situations / Jupiter UK Special Situations

Investec UK Alpha is a direct replacement for JOHCM UK Opportunities which was sold in August 2017. Through the interim period we increased the weight of other UK Growth funds. Investec is an ideal core holding within an asset class; it is style agnostic with a strong focus on risk. Risk is judged in the sense of individual business risk and ensuring the fund isn’t over exposed to a given factor or theme.

BUY

REDUCE

Portfolios Affected: PIM Tactical Active

Allianz Gilt Yield BlackRock Corporate Bond / Fidelity Moneybuilder Income

The committee felt that with spreads of Corporate Bonds versus Gilts at extremely low levels they perhaps do not reflect the risks of holding bonds in a post QE era. With interest rates now rising in the US and UK, defaults may rise as some “zombie” companies find conditions more difficult when they come to refinance debt. Thus reducing our exposure to the asset class whilst investing in the defensive asset class of Gilts seems appropriate given yields have moved quite aggressively.

BUY

REDUCE


Portfolios Affected: PIM Tactical Ethical Active

Allianz Gilt Yield

Liontrust Sustainable Future Corporate Bond / F&C Responsible Sterling Bond


Portfolios Affected: PIM Strategic Ethical Active A&B / PIM Tactical Ethical Active

Vontobel mtx Sustainable Emerging Markets Leaders Stewart Investors Global Emerging Markets Sustainability

Stewart has struggled of late and with three year numbers being affected we looked to identify a replacement. Not dissimilar to Stewarts process, Vontobel focus on quality and growth but they incorporate a valuation element that means there is a constant adjustment to portfolios to capture excess returns as the market trades above and below their estimates of a fair value range. In addition, their downside protection has been very good so the Sortino ratios are excellent against the sector.

Portfolios Affected: PIM Tactical Passive




BUY

REDUCE

BUY

SELL

BUY

REDUCE

Portfolios Affected: PIM Strategic Ethical Active C & D

Rathbone Ethical Bond / Royal London Ethical Bond / Liontrust Sustainable Future Corporate Bond / Kames Ethical Corporate Bond F&C Responsible Sterling Bond

The performance of F&C has fallen behind peers over both 3 and 5 years. In the absence of superior alternatives (of a sufficient size), consolidating into the other existing funds is the most suitable alternative for C & D profiles.

INCREASE

SELL

Portfolios Affected: PIM Tactical Income

Schroder Income Maximiser Fidelity Enhanced Income

These funds are used within Tactical Income and use covered call option strategies to enhance the yield. This means they inevitably sell some upside in positive markets because the options will be called. Despite that, Fidelity has performed poorly of late while Schroder has performed very well given the stark difference in style. after extensive research we feel a blend of the two styles complement one another well so have halved our holding in Fidelity to buy Schroder.

BUY

REDUCE


Index and Peer Group Returns

Index and Peer Group Returns to period end 31 March 2018





LIBOR GBP 12m 0.21% 0.40% 0.73% 1.56% 2.61% 4.55%

IBOXX Sterling Gilts All Maturities 0.20% 2.25% 0.49% 7.33% 10.87% 23.82%

Citi UK Inflation-Linked Securities Index -2.25% 1.28% -1.85% 18.09% 20.07% 36.54%

IBOXX Sterling Corporates All Maturities -1.48% 0.53% 1.56% 12.38% 12.49% 30.76%

Barclays Global Aggregate GBP (H) -0.46% 0.02% 1.22% 1.82% 4.53% 14.42%

PIM Property Index 0.85% 2.43% 5.04% 3.97% 10.36% 35.27%

FTSE All Share -6.87% -2.25% 1.25% 23.48% 18.63% 37.57%

FTSE UK Equity Income -7.06% -2.94% -1.35% 16.02% 9.23% 28.11%

FTSE North America -4.54% 0.80% 1.33% 36.77% 41.72% 95.62%

FTSE Europe Ex UK -4.42% -3.98% 4.34% 34.04% 28.81% 59.12%

FTSE Asia Pacific Ex Japan -4.44% 2.71% 5.98% 44.97% 33.66% 50.01%

FTSE Japan -2.63% 5.10% 7.53% 42.79% 38.15% 72.90%

FTSE World ex UK -4.23% 0.53% 2.73% 37.29% 37.83% 77.98%

FTSE Emerging -2.15% 3.83% 8.75% 47.45% 34.39% 39.49%

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Comparative Indices

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PIM In-House Solutions

PIM Strategic Multi-Option 1-10 Strategic

PIM Strategic Conviction 1-10 Strategic

PIM Strategic Guardian 1-10 Strategic

PIM Strategic Active 1-10 Strategic

PIM Tactical Active 1-10 Tactical

PIM Tactical Passive 1-10 Tactical

PIM Tactical Income 1-10 Tactical

PIM Strategic Ethical Active (A-D) 1-10 Strategic

PIM Tactical Ethical Active 1-10 Tactical

Fund Manager Focus Solutions


1-10 Strategic

DFA Multi-Option: Global Perspective

1-10 Strategic

Distribution Technology Multi-Option (DT) 1-10 StrategicN

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Solutions Index

Strategic

Strategic portfolios define and fix the asset allocation weightings at the outset and are based on historical performance data. These are reviewed annually and are only changed when structural errors have been identified. Once the weightings of the portfolio are established, the emphasis is on maintaining the asset allocation through rebalancing to achieve performance over the long term.

Active

Active funds are selected for their potential to outperform their sector with lower volatility. Active funds have higher charges as a result of the increased cost of the management process and associated research relative to Passive funds.

Tactical

Tactical asset allocation takes its lead from the fixed asset weightings of a strategic portfolio, but then allows the investment manager a degree of flexibility to vary those weightings within a risk-controlled framework. By moving among the various asset classes the investment manager looks to create an additional source of investment return by taking advantage of short term market inefficiencies which can help to manage investors’ exposure to risk.

Passive

Passive funds are selected for their ability to track the asset class benchmarks closely. As processes are largely technology driven, there is minimal human intervention and the associated cost is lower.

Investment Solutions At Parmenion we provide an extensive range of investment solutions across varying Risk Grades and investment styles, here is a summary:


PIM Efficient Frontier 8-11 Active and/or Passive

All Users This solution uses seven asset groups and allows for active or passive fund selection, within a Strategic Asset Allocation. The PIM Strategic Passive solution has an identical structure to PIM Multi-Option Passive and has therefore been excluded from the QIR.

PIM Efficient Frontier 12-15 Active and Passive

All users The PIM Strategic Conviction solution enables clients to divide their investment across various different asset classes. The amount invested into each asset class is dependent upon the clients’ risk profile and, once agreed, is kept constant with periodic rebalancing. A strategic asset allocation will be followed and periodically reviewed by the Investment Manager. Only in exceptional or unusual market conditions will the Strategic asset weightings be re-defined, as appropriate. The split between active and passive funds will be determined by PIM using both quantitative and qualitative measures and may vary by asset class as deemed appropriate by the investment managers.

PIM Efficient Frontier 16-19 Active and/or Passive

All users This solution has been specifically designed to be used within a drawdown environment whether that be via pension drawdown or otherwise. Sixteen individual asset classes are blended to provide 10 Risk Graded portfolios that are dual optimised to provide both capital growth and a stable yield. The solution uses predominately active fund managers however some passive funds are also utilised with certain asset classes.

PIM Efficient Frontier 20-21 Active All Users This solution is based on a pure strategic asset allocation and active fund selection using six asset groups, including Equity Income, Equity Growth and Global Alpha.

PIM Asset Allocation Committee 22-27 Active All Users This solution is based on PIM’s tactical asset allocation and a passive fund selection, investment philosophy and process.

PIM Asset Allocation Committee 22-27 Passive All Users This solution is based on PIM’s tactical asset allocation and a passive fund selection, investment philosophy and process.

PIM Asset Allocation Committee 28-31 Active and/or Passive

All Users This investment solution enables clients to invest in a range of carefully constructed Tactical portfolios, according to their requirement for yield, total return and capacity for loss. The amount invested into each portfolio is dependent upon the client’s risk profile and, once agreed, is kept constant with periodic rebalancing. The investment managers have and will use a degree of flexibility to vary these weightings within a risk controlled framework, to maintain the portfolio’s targeted yield, maximise total return and minimise losses in response to changing market conditions.

PIM Efficient Frontier 32-39 Active All Users This solution combines various styles of ethical investing with strategic asset allocations and an active fund selection. All funds are screened for positive and negative ethical criteria and monitored on an on-going basis by the Ethical Oversight Committee.

PIM Asset Allocation Committee 40-43 Active All Users This solution is based on PIM’s tactical asset allocation and active fund selection, investment philosophy and process. Funds are selected from the EIRiS universe which are deemed to be broadly ethical in nature.

PIM Efficient Frontier 44-47 Pure/Passive Approved Users This solution provides the client with additional flexibility to accommodate both pure and passive exposure within each asset class, and to vary the value and small cap tilt as appropriate. The portfolio strategy incorporates a traditional domestic bias to UK equity in line with the Dimensional approach. This solution is strategic in nature; as such asset allocations are only changed on an infrequent basis, in response to structural issues.

PIM Efficient Frontier 48-51 Pure/Passive Approved Users This solution provides the client with additional flexibility to accommodate both pure and passive exposure within each asset class, and to vary the value and small cap tilt as appropriate. The portfolio strategy incorporates a global approach to asset allocations, in line with each country’s market capitalisation relative to the global economy. This solution is strategic in nature; as such asset allocations are only changed on an infrequent basis, in response to structural issues.

Distribution Technology’s Strategic Asset Allocation (SAA)

52-56 Active and/or Passive

All Users This solution asset weightings match DT’s Strategic Asset Allocation (SAA) and allows for active or passive fund selection.

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Notes


Get in touch To speak to one of the Parmenion Investment Management team, you can call 0345 519 0100 or email [email protected]

Parmenion Investment Management Ltd Head Office: 2 College Square Anchor Road, Bristol BS1 5UE. Office: 0345 519 0100 Website: www.parmenion-im.co.uk Email: [email protected]

Parmenion Investment Management Ltd is a subsidiary of Parmenion Capital Partners LLP.

Parmenion Capital Partners LLP is authorised and regulated by the Financial Conduct Authority, registration number: 462085.

Wholly owned subsidiary of Aberdeen Asset Management PLC and Aberdeen Investments Limited.

Parmenion Capital Partners LLP is registered in England and Wales OC322243.

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